Offers

Who offers capped deals?

Several lenders dip into and out of the market all the time so you need to look at the latest newspaper or internet best-buy tables for the current players. Of the big banks Abbey is most likely to be in the charts much of the time, while building societies including Coventry, Kent Reliance, Marsden and Skipton are also long term supporters of the capped market.

Whether a capped mortgage will work for you depends on one final factor: timing. The experts say that the deals tend to work out best-value when interest rates go up – that’s when the caps come into their own. If you take out a capped rate in a time of falling interest rates then you may not be as happy. Past experience shows that some lenders take a long time to pass on any Bank of England rate cuts to capped mortgage customers. Sometimes cap customers don’t get any benefit of a rate cut because lenders fail to pass it on at all. So while no-one ever knows exactly what is going to happen to interest rates in the future it’s probably best to stick to a discount or tracker deal if rates are expected to fall. If interest rates are rising and expected to go even higher than a cap could prove to be a better option. They sound like the dream mortgage deal. And in the right circumstances the best of them can end up being just that.