Mortgage Types Flashcards
1
Q
Capped
A
The lender guarantees that the interest rate will not rise above a given level for a certain period of the loan.
2
Q
Cap and collar
A
Guarantees the interest rate won’t rise between higher (cap) and lower (collar) amount for a period of time eg 2 years
3
Q
Discount
A
Interest rate charged for an initial period of the loan is reduced by set % below standard rate charged by lender.
