The CAP mortgage offers the prospects of a variable mortgage in respect of reductions in the rate of interest and protects against a burden of interest which is too great with a roof on interest (CAP = upper limit on interest).

The rate of interest is fixed for the customer individually. It depends on credit-worthiness, use of the product and the borrower's earnings potential, as well as the quality collateral security.

Note / features

• minimum amount: CHF 200,000.00 only as first mortgage; term 3 or 5 years
• Normally, there are no redemption payments.
• no pegging of interest rate
• The maximum interest burden is composed of the interest ceiling (upper limit of interest) and the agreed CAP costs.  
• standard lending on owner-occupied home: maximum 80% of market value
• cancellation normally possible during the term on payment of an early repayment penalty    

Components:

CAP costs (fixed)
costs of hedging the interest rate exposure depending on interest roof, spread over the term

Market interest rate (variable)
basis rate depending on category of property (variable mortgage), effective rate of interest (variable) is rounded off in each case to the next higher 1/8 %

Interest roof (fixed)
corresponds with the upper limit of interest during the term

Effective rate of interest (variable)
comprised of market interest rate plus CAP costs

The CAP mortgage ideally complements the classical variable mortgage. On paying a modest commission, the interest risk can be given an upper limit. The maximum interest burden is made up of the interest roof (upper limit of interest) and the agreed costs of CAP.