Capping the interest rate on your home loan means you'll pay less interest if rates fall. But the great news is that even if rates do go up, your interest rate will never go higher than the capped rate. You can ‘cap’ your interest rate for 1 or 2 years.
It's for you if:
- you want to cap the interest rate you could pay for the next 1 or 2 years
- you may want to make lump sum payments off your loan
- you may want to increase your home loan repayments