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Capped rate mortgage.

A capped rate mortgage puts a maximum limit on the interest rate that you have to pay. You therefore gain the security of having a 'ceiling' or upper limit to the amount that the lender can increase the interest payable on your mortgage.

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This period of capped interest is for a specified period only; typically between one and five years ,some capped rate mortgages also have a 'collar' or lower limit below which the interest on your loan cannot fall. At the end of the specified period your mortgage will usually revert to the standard variable rate.

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