Pretty much the same as a fixed rate mortgage with one exception, if the rate falls below the capped rate then the borrower pays the lower rate. Heads you win, tails you win.
Once again if the mortgage is redeemed within the capped rate period then there will be a penalty normally of 6 months mortgage payments or 5% of the loan.
Your home is at risk if you do not keep up with repayments on a mortgage or any other loan
secured on it. Be sure that you can afford the repayments before entering into a credit agreement.
