8 Jul

Interest rate cap launched 'to protect mortgage borrowers'

Interest rate cap launched 'to protect mortgage borrowers'

A new mortgage product has been launched that is designed to protect homebuyers with their eye on a house for sale from rising interest rates.

John Charcol has announced The Interest Rate Protector, which allows people with large mortgages to set a cap on the interest rate they wish to pay.

The company said it would be ideal for those who do not wish to restrict themselves by opting for a fixed-rate product, but are concerned about the possibility of interest rates rising considerably in the future.

Mortgage buyers are able to choose how long they want the protection for and also the level at which they wish the cap to be set.

John Charcol spokesperson Ray Boulger said: "The Interest Rate Protector provides a different and often cheaper way to buy protection."

Should the Bank of England base rate rise above the cap level chosen by buyers, the difference will be covered by monthly payments until it decreases below the chosen level again.

This comes after Santander recently announced that it has cut the interest rates on its fixed-rate mortgages by up to 0.2 per cent, with a two-year fixed deal now reduced to 3.29 per cent. ADNFCR-1222-ID-19880469-ADNFCR

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