Capped mortgages 'have a place' in the market

Posted: 04 Aug 2010 10:23:53 GMT

There is a place in the market for capped mortgages, one expert has indicated.

Editor at What Mortgage Ben Wilkie said if interest rates rise, more lenders will offer capped deals.

"They are good for borrowers who are prepared to pay extra up front on their variable rates and then have the cap for the future," he added.

Mr Wilkie noted the mortgages were a popular option when first launched, even though they were never the cheapest product on offer.

He explained lenders only stopped offering capped loans because there was uncertainty surrounding the market and risks always have to be assessed.

The specialist's comments follow news Coventry Building Society is offering a capped mortgage with a maximum loan-to-value of 65 per cent at a current rate of 2.99 per cent.

Another deal with a maximum loan-to-value of 75 per cent is also available and will be capped until June 30th 2012.


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