IIB Homeloans has launched a new capped tracker mortgage product which it claims allows borrowers to protect themselves against the risk of a dramatic rise in interest rates.
During the three-year period of the cap, the tracker rate will be 1.25 points above the European Central Bank rate. The rate as of today is therefore 4%.
But if the ECB rate plus 1.25 points exceeds 4.99% within the three-year period, borrowers will still pay a maximum of 4.99%.
After the three-ear period, the rate will revert to the ECB rate plus 1.25 points.
* Northern Rock is to increased its savings rates by 0.15 points from June 29 following today's ECB rates rise.
