New capped rate mortgage offers

 Coventry Building Society has launched a new mortgage deal which tracks the Bank of England’s variable rate (currently 5.25%) but adds a cap ensuring it will not rise above a certain level.

This deal is pitched at 0.3% above the base rate thus they will charge 5.55%. The cap is set at 5.69% and this will remain in place until 2012. This means no matter what however many rises there are in rates over the next 5years you are guaranteed your mortgage rate will never rise above that amount.

Statistically this would mean on a 25year repayment mortgage of £100,000, monthly repayments would be £617.

This particular deal comes with a £199 booking fee and £650 arrangement fee.

The beauty of capped rate mortgages is that you can take advantage whenever interest rates fall, and be secure in the knowledge you know the absolute maximum you could ever be asked to pay over an agreed timescale.

Woolwich offers a fairly similar product. They are set at .23% above the base rate and offers to cap at 5.99% for two years. This particular mortgage deal has a £595 arrangement fee and with the same £100,000 home loan example, the repayment would be £613.

One of the cheapest deals on the market is offered by Hinckley & Rugby Building Society at 0.07% above the base rate. Monthly repayments on the typical £100,000 home loan would then be £603, however initially you would need to pay a rather high fee of £795.