Interest Rate Caps From Enness Private Clients

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) October 14, 2010 -- Do you have concerns over the base rate moving up next year?

Do you have too little equity in your property to re-mortgage?

Do you have a large portfolio which no-one wants to re-mortgage?

Do you have a favourable SVR but want to protect yourself against future rate movements?

If the answer to any of the above is Yes then an Interest Rate Cap could be the product for you.

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Interest Rate Caps From Enness Private Clients

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http://www.largeMortgagaeBroker.co.uk

Executed as a derivative contract between an individual and the market, a Cap will allow consumers to protect themselves against the ‘downside’ of adverse rate movements but crucially, will still allow them to enjoy the benefits of the low rates we are currently experiencing.

An interest rate cap works as a hedge, or upper limit to your interest rate to protect against future upward BoE base rate movements . Clients can buy into a rate of their choice; 3%, 4%, 5%, etc. (obviously the lower the rate the higher the cost) for a set period of time; 2yr, 3yr, 4yr, 5yr and so on (again higher fee for longer period). The end result being that when rates move above the rate purchased the Interest Rate Cap pays back the amount over and above the contract price to the individual for the duration of the contract.

For example; if you have a 3% cap for £500,000 over 5 years and the base rate is 5% for 3 of those years, you will receive a payment equal to 2% per annum.

‘With commentators ever more confident that once rates start increasing they will do so sharply, this product offers a lot of security for those that are unable to secure a re-mortgage, without actually having to be in a position to qualify for a re-mortgage’ says Islay Robinson Partner at Enness Private Clients. ‘As the contract is taken out against the market, mortgage criteria such as income or loan to value or rental income are not important. The product will also be portable so will not prejudice against switching lenders further on down the line.’

‘The main beneficiaries are those that lenders do not currently see as that appealing; landlords with large portfolios’ and those without enough equity in their homes, but also those on low SVR’s or lifetime trackers, such as Intelligent Finance, C&G, Woolwich, HSBC, etc., who currently have low rates but wish to protect themselves over the medium to long term.’

Minimum caps are 250k, so not everyone will qualify but if you have a concern over future rate movements, and with the majority of banks forecasting further drops in the housing market next year combined with concerns over the economy and rising unemployment, re-mortgaging certainly won’t get any easier in the short term, so this serves as a viable alternative for many in the interim.

More information can be found online at http://www.largeMortgagaeBroker.co.uk

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