What is a capped mortgage?

Capped rate mortgages are a type of variable rate mortgage, but with one important difference: they have an interest rate ceiling, or cap, beyond which your payments can't rise.

A capped rate is normally only for an introductory period – typically anything from two to five years. They are also the rarest of all mortgage types – most of the time there are only a handful of capped rate products available in the whole market!

Capped mortgages are the only rate type, other than fixed rates, that will give you payment security.

They guarantee that your mortgage payment won't go above a certain level, but because they are a kind of variable rate, they also let you benefit from lower payments when rates go down.

Capped rate mortgages do tend to offer a higher variable rate than the best tracker rates and discounted rates available because you are paying for the security that the interest cap provides. They will usually also make an Early Repayment Charge if you remortgage to another lender or pay off the mortgage in full (although you may be allowed to make overpayments).

Once the introductory capped rate period comes to an end, your mortgage will go onto a lender's Standard Variable Rate or a tracker rate for the remaining term, although you can remortgage to a new deal if you wish.

Mortgage brokers remove a lot of the paperwork and hassle of getting a mortgage, as well as helping you access exclusive products and rates that aren’t available to the public. Mortgage brokers are regulated by the Financial Conduct Authority (FCA) and are required to pass specific qualifications before they can give you advice.

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Our mortgage calculator helps you to see how much your mortgage might cost you each month.

Our how much can I borrow calculator gives you a range of how much a lender might consider lending you under a mortgage. This calculation is only an indication only.