Capped & Collar Rate Mortgages

With a capped rate mortgage the interest rate can go up or down in line with movements in the lender’s standard variable rate, but cannot go above a set upper limit, known as the ‘cap’ or ‘ceiling’.

This type of mortgage can also have a set lower limit, known as the floor or ‘collar’. For these mortgages the interest rate can move between these limits but cannot fall below the collar or go above the cap. This product may carry an early repayment charge.

Is it right for me?

Yes – If you like to budget with some certainty, think mortgage interest rates might rise above the cap, or you want the security of knowing your payments cannot rise above a set level and would like to benefit from any fall in interest rates.

No – If your mortgage adviser can find you a fixed rate set at a lower rate than the capped rate, and you think rates are unlikely to fall below the level of the fixed rate deal.

Still unsure?

Why not speak to an advisor to see how we can help you find the right mortgage deal.

Alternatively, see an explanation of the Cashback mortgage product.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Mortgage Connections UK Ltd is an appointed representative of Quilter Mortgage Planning Limited who are part of the Quilter Group of companies, which are authorised and regulated by the Financial Conduct Authority.

The guidance and/or advice contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK.