Capped Mortgage

A capped mortgage is a mortgage with an interest rate that fluctuates and has a maximum limit above which it can not go. In other words, the initial interest rate that you agreed upon with your lenders will go down but will only go up to a certain maximum level. Some capped mortgages will also have some discounts on the fees.

The advantage of this type of mortgage is that you can profit from interest rate drops and you can also plan your finances knowing the maximum costs of your mortgage.

The disadvantage of this type of mortgage is that the initial interest rate that you will pay will be higher than a fixed interest rate or a discounted interest rate.