Capped Rate Home Loans
Sometimes a credit default or negative listing is the last thing someone expects to find hiding on their credit report. Luckily, when this happens companies like ours here at Clear Credit Solutions are here to help. Assisting to remove these negative listings will not only improve your credit score but will also increase the likeliness of you getting approved for a finance application.
That is the positive. The negative is that not everything can be removed from a credit report. There are some listings that have to remain on a credit file and cannot be taken off by a company like ours here at Clear Credit Solutions.
If you have discovered something on your credit report and need clear credit history then get in contact with the team after you view some of our useful articles.
If you’re in the market for a home loan, then take a closer look at capped rate loans. In this clear credit article, we’ll discuss everything you need to know about them and go over what sets them apart from other interest structures available on the market today. Get ahead of your search by discovering more now!
With a capped rate home loan, you can have the security of knowing that your interest rate won’t exceed a predetermined level over an agreed upon time period – while still being able to reap the benefits if rates drop. This is different from fixed-rate mortgages in which your interest remains unchanged for the duration.
To provide you a glimpse of how a home loan with an interest rate cap could be structured, let’s say the cap is set at 7.5% per annum (p.a.) and the capped period lasts three years—during this time your interest rate will not exceed 7.5% p.a.. This can offer homeowners some financial security knowing their rates won’t unexpectedly spike during their initial repayment term!
Put simply, a capped rate home loan is much like a variable-rate mortgage with one major distinction—it includes an upper limit to guard you against rising interest payments. This safeguard enables you to be aware of the maximum monthly repayment that could possibly apply.
When a capped rate home loan reaches the close of its fixed period, you can simply recast it or opt for either a variable or fixed-rate. The same thing goes for when your current fix term comes to an end.
Is a capped rate home loan a good option for me? Unfortunately, in the current market it is virtually impossible to find one. It may be more beneficial to compare variable rates, fixed rates or split rates—which have numerous advantages and disadvantages depending on your financial circumstances.
If you’re looking for the closest approximation of capped rate mortgages today, a split rate home loan is your best option. As indicated by its name, this type of loan divides up your mortgage between a fixed and variable interest rate.
Part of your loan has a fixed interest rate, safeguarding part of your mortgage repayments from fluctuating. Additionally, the other portion is on a variable rate that offers various advantages – especially if rates decrease. If this happens, you can take advantage by having both your interest and repayments reduced for this section of your loan.
Although having a capped rate home loan might not be the right solution for everyone, we hope this article gave you a better understanding of what it is and how it could possibly benefit you.
Here at Clear Credit Solutions, we are the credit repair experts who want to help you obtain the finance you need by removing negative listings off from your credit report. So don’t wait any longer, call us now and let us help you take control of your finances!
At Clear Credit Solutions, we are the credit repair experts. We want to help you obtain the finance you need by removing negative listings off from your credit report. Contact us today On 1300 789 783 or fill out an application to clear credit! We will work with you closely to understand your financial goal and create a plan that helps you achieve it in no time. So don’t wait any longer, call us now and let us help you take control of your finances!