Which mortgage rate category protects borrowers from rates rising above a cap?

• A. Tracker
• B. Variable
• C. Fixed
• D. Capped

Answer: (D)

A capped rate mortgage combines a variable or tracker movement with a ceiling that sets an upper limit on the rate. As market rates move up, your rate can rise, but it cannot exceed the cap. This provides protection from rates climbing higher than that ceiling, giving the borrower predictability in payments up to the cap. Other options either move with the reference rate with no upper bound (tracker) or adjust during the term without a cap (variable), or lock in a rate for a set period with no ongoing cap once that fixed term ends (fixed). So, when protection against rising above a cap is the feature in question, the capped rate is the right choice.