Fix mortage or interest rate cap?

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kiely2

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We have a tracker mortgage at ECB+1.1% and are just wondering what the best options are before interest rates begin to rise again (which I believe will happen sooner now that Germany and France are out of recession).

Should we move to a fixed rate mortage for 5 or 10 years?

One other alternative, which I don't know much about, is to buy an interest rate cap. From my understanding of what this is, we would keep our tracker rate with our bank and have a separate arrangement with someone else where we would receive payment for any increases to the ECG rate above our agreed "cap". Is this a correct understanding?

Does anyone know anything about this? How does a private individual go about buying something like this?
 
There are plenty of previous posts about this, search for them.
 
There are plenty of previous posts about this, search for them.

about consumers buying an interest rate cap? Not that I have seen. As far as I am aware it would be almost impossible for an individual/consumer to purchase a stand-alone interest rate cap as opposed to a capped rate mortgage. at the very least they would need to sign an ISDA legal document, all sorts of hoops and hurdles with legal firm/accountants etc. Probably would also require to put up some form of collateral such as a lien over a lump of cash on deposit.... Not aware of any banks offering consumers caps or ranges.
 
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