# Interest rate cap

With an interest rate cap, you can limit your loan’s interest expenses for years ahead.#### An interest rate cap will help you to keep your loan interest costs under control, even if interest rates rise

You can set a maximum limit for your loan’s reference interest rate for up to 14 years, to secure your finances if interest rates rise.

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

You can set a maximum limit for your loan’s reference interest rate for up to 14 years, to secure your finances if interest rates rise.

#### If you have an interest rate cap, your loan repayment plan can adapt if your situation changes

You can agree on changes to the loan repayment plan and even pay the loan off ahead of schedule. Your interest rate cap will then end, without extra charges.

## An interest rate cap will protect you from rising interest rates, bringing peace of mind

You can set an upper limit for your loan’s reference interest rate, which will not be exceeded while the interest rate cap is valid.

You can purchase an interest rate cap for a new or old loan, for the period of your choice: 5, 7, 10 or even 14 years. An interest rate cap is interest rate protection suitable for a home loan or other Euribor-based loans. You can also agree on an interest rate cap for a bank loan.

## How does the interest rate cap work in practice?

A maximum reference rate is set for a floating rate loan, for an agreed period. The reference interest rate may change depending on market conditions, but it will not rise above the maximum you set. When the reference rate is lower than the maximum rate you chose, you will still benefit from lower interest rates.

The protection period of the interest rate cap may be shorter than your remaining loan term. When the interest rate cap ends, changes in the reference interest rate will affect the interest expenses of your loan as normal.

## How an interest rate cap works based on different repayment methods

An interest rate cap can be set for loans with different repayment methods. The cap sets an upper limit on rises in the reference rate in all cases, but the effect of rate rises on regular loan payments or the loan term varies.

### Variable annuity

The loan term remains the same. The size of regular loan payment could change even if the loan were protected with an interest rate cap. The benefit of an interest rate cap in this repayment method is that it will help you to keep your interest costs under control. The loan is paid back within the planned schedule. The regular loan payment may also decrease if interest rates fall.

### Equal amortisation

The loan term and repayment of the loan principal remain the same. The size of regular loan payment could change even if the loan were protected with an interest rate cap. The benefit of an interest rate cap in this repayment method is that it will help you to keep your interest costs under control. Also, a maximum loan payment can be set for the cap’s period of validity. The loan is amortised as planned, and the loan term is not prolonged.

### Equal payment

The size of regular loan payment remains the same. The loan term could change even if the loan were protected with an interest rate cap. The benefit of an interest rate cap in this repayment method is that it will help to prevent your loan term getting longer if interest rates rise. The size of regular loan payment remains the same even if interest rates rose, meaning that your monthly costs will stay the same.

## We’ll help you to choose interest rate protection that suits you

The protection level and period of the interest rate cap can adapt to your needs. An expert at your bank will help you to choose a suitable interest rate cap, based on criteria such as these:

- The reference interest rate ceiling as a percentage.
- The protection period, which can be 5, 7, 10 or 14 years.
- Will the cap limit the reference rate rise for all of the loan or, for example, just half of it?
- Will you pay the interest rate protection fee in one instalment (premium), or monthly as part of the loan margin during the cap’s period of validity?

## Frequently asked questions

The interest rate cap is granted by an OP cooperative bank.