Mortgage Question,Help Required.

DOUGLAS_JACK

Hi,wondered if someone can help me here,I currently have a mortgage with a building society ,when the Libor rate fell to 0.5% the building society said I had a cap on my mortgage that meant I still had to pay 3%,my question is if the Libor rate was to move to say 1.5%,will I still pay the 3% or will the building society expect me to pay the 1% increase on top,thanks for any help.

Jonbvn

What you have is called a "Collar" not a cap.

As to whether it will increase if BOE IR rises, you need to check your T&C's or check directly with your lender. Note that LIBOR is not the same as BOE IR.

Sepa74

I have a floor, which means the lowest it will ever go is 3% even though rates are so low. It will stay at 3% until the Bank of England rate goes up enough that it pushes my interest rate over 3%.

Yours is probably the same, but you should check with your bank to be 100% sure.