8
Jul
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. 