Capped Rates
Capped rate - similar to a fixed rate, but the
interest
rate cannot
rise above
the cap but
can vary
beneath the
car rate
set.
Sometimes
there is a
collar
associated
with this
type of rate
which
imposes a
minimum
rate. Capped
rates are
often
offered over
periods
similar to
fixed rates
e.g. 2,3,4
of 5 years.
.
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