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| What is Capped Rate?
The Capped Rate is the maximum amount of interest you pay on your mortgage, this percent is fixed for a few years like 1-3. As we all know interest rates increase and decrease periodically if the rate goes above the capped rate then your only paying the capped rate. This way you don't have to worry about the rate going above the roof and you can enjoy the decreasing rate.
For example it works like this the capped rate is set on 4.5% now if the interest rate reaches and goes above this limit you only have to pay 4.5%. But if the rates go under the amount then you pay that percentage. The ceiling is set but the bottom isn't. | | | | |
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