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Interest rate cap

With interest rate cap you can prepare for your loan interest expenses for years ahead.

Interest rate cap helps you anticipate your loan servicing costs even if interest rates changed

You can set a maximum limit for the reference interest rate of your loan for up to 14 years. In this way, you can secure your finances in case interest rates begin to rise.

Interest rate cap sets a maximum for your loan’s reference interest rate but you will also benefit from falling interest rates

With an interest rate cap, you can set a maximum for your loan’s reference interest rate, but if the reference rate is below the limit you set, you will also benefit from low interest rates.

Interest rate cap is as flexible as your loan

With interest rate cap, the repayment plan of your loan will remain flexible. You can agree on changes in your repayment plan or pay off the loan early, in which case the interest rate cap will end and no separate expense will be charged for it.

Interest rate cap protects you from rising interest rates and brings security to your finances

With an interest rate cap, you set an upper limit for your loan’s reference interest rate which will not be exceeded during the validity of the interest rate cap. You can purchase an interest rate cap for a new or an old loan for a period of your choice: 5, 7, 10 or even 14 years.

Interest rate cap is an interest rate protection suitable for a home loan or for other Euribor-based loans. Besides your home loan, you can also protect your consumer credit with interest rate cap.

Have you already tested our calculator to see how a rise in interest rates would affect your monthly loan repayment?

 

The price of interest rate cap depends on prevailing interest rates

The price of the interest rate cap is determined by the interest rate level at the time of signing the agreement. As interest rates rise, so will the price for new interest rate caps. 

You can pay the interest rate cap either as part of your loan instalments or as a lump-sum payment.

The interest rate cap is paid either as a lump-sum premium at the time of purchase (interest rate cap with lump-sum premium) or monthly as part of the loan margin during the validity of the interest rate cap (interest rate cap charged in the loan margin).

Paying the interest rate cap in the loan margin

Interest rate cap charged in the loan margin is paid as part of the loan payment amount, which means that it is included in the total interest of the period of validity of the interest rate cap. The interest rate cap cannot be cancelled early. If a loan protected with an interest rate cap is paid off early, the interest rate cap will end and no separate expense will be charged for that.

Paying the interest rate cap as a lump-sum premium

The interest rate cap with lump-sum payment is paid on a one-off basis at the moment of taking out the interest rate cap. The interest rate cap with lump-sum payment can be cancelled early, in which case the bank will return the interest rate cap premium calculated for the present loan principal and for the unused period of the interest rate cap. The bank will return the premium on the basis of the going market price at the time of the repayment and up to the maximum amount of the original interest rate cap premium. This also applies if a loan with an interest rate cap is repaid early.

In case you become unemployed, incapable of work or are on sick leave for a longer time, you should also protect your home loan in connection with protection against higher interest rates. Adjust your monthly loan repayment so that you can also save some money alongside repayments.against higher interest rates. Adjust your monthly loan repayment so that you can also save some money alongside repayments.
The interest rate cap is offered by the Group member bank.