Capped mortgages – your rate may still increase.
With a capped mortgage your lender has set an upper rate limit beyond which your rate cannot rise. However rates can rise up to the cap, which means your monthly costs can increase if you start at a lower level.
In addition some UK lenders have introduced an increase to their mortgage cap. If the cap to your mortgage has been raised you are advised to call Deal Direct to see if there is a cheap rate remortgage available to switch to.
If a lender chooses to increase their mortgage cap level, they are required to give notice to mortgage-holders. The Bank of Scotland raised their cap, but was then fined for failing to give notice to customers whose rate was increased without any notification.
The lender was investigated and was found to be at fault, and has been required to make repayments to customers who suffered an increase to their capped standard variable mortgage rate. Around 300,000 customers have had to be compensated.
If you are on a SVR you should consider switching, lenders can change their rates and cap levels at whim and with such cheap fixed rate mortgages currently on offer why be held to ransom by your lender?
Call Deal Direct to compare the cheapest remortgage rates and let us help you switch to a new low rate deal.
Call an adviser today for a quote.
