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Capped Home Loans


RateCityStaff

By RateCityStaff

19 Sep 20091 min read

What is a Capped Home Loan?

Capped home loans have a security feature similar to fixed home loans. Capped home loans however are not fixed at the one interest rate for a period of time, they are semi-variable.

Their interest rate can reduce in a similar fashion to rate reductions for variable rate mortgages. When rates increase, a capped home loan interest rate will only increase up to a specified rate according to the individual lender. The capped rate period is for a limited length of time and can vary according to each loan’s terms.

For example, a capped period can be for the first year of the loan, for the first two years, three years or five years, depending upon the loan terms.

Benefits of a Capped Home Loan?

Capped home loans can be beneficial when interest rates are expected to increase but are generally at a higher rate than standard variable interest rates.

Compare, search and apply for some of the best value home loans at Australia leading financial comparison site, RateCity.com.au


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RateCity provides Home Loan news and features, including a range of weekly stories and economic updates. By checking our Home Loan news and features daily, you can ensure that you receive up to date, expert commentary on current financial and economic issues. Before you search, compare or apply for a Home Loan product that may be suitable for your needs, help yourself understand the market by reading Home Loan news and features at RateCity.

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