News and Guide

News from DL MoneyPark and information on the financial market and Swiss romande real estate

Author : Kristen

Interest rate cap

A mortgage calculated with a capped interest rate protects you from excessive rate increases. With a fixed ceiling set at the beginning and effective throughout the loan term, you benefit from rate decreases without worrying about increases.

The interest rate is adapted every 3 to 6 months depending on the institution. An insurance integrated in the product (rate ceiling: CAP) protects you from overly sharp rate increases. The coverage costs vary depending on the ceiling that you choose.

The expenses, generally quarterly or bi-annually, include a portion of the base interest, bank margin, costs of increase insurance (CAP) and a portion of the amortisation

Duration : fixed, in general 3 or 5 years.

Termination: at the end of the contract, you will be free to choose any type of rate or to change financial institutions with advance notice, generally one month ahead of time.

During the loan period, you can terminate, however the financial institution will require a that could be the total amount of interest until the expiration of the rate or framework agreement. In this case, negotiation and calculation will be necessary.


Articles on mortgage loans