Capped & Collared Remortgages

Capped & collared remortgages come under the umbrella of variable rate remortgages.

There's a real possibility that the remortgage deal may impose limitations on the minimum and maximum rates of interest applicable to the mortgage loan. These are often referred to as the Cap (Maximum) and Collar (Minimum) rate applicable. The remortgage applicant is subsequently prepared for the highs and lows when it comes to making the monthly remortgage repayments. For example: If the cap rate is at 5.75 percent and the collar rate is at 3 percent, the charge made to the loan will be at the variable rate that is prevailing.

Some remortgage applicants may not wish to limited to a minimum interest rate on the mortgage debt, in which case a Capped Rate Remortgage would be more applicable.

While the monthly repayments that you have to make with capped & collared remortgages could go up and down, you are assured that there is a limit to how much they can go up as well as to how much they can go down.

The most important benefit of capped & collared remortgage is that the borrower is protected from any significant rise of the interest rates. This helps the borrower to budget their money when it comes to repayments.

Back to Capped & Collared

Skip To Content