With a capped rate mortgage, the rate of interest you pay is capped for a specified period of time. This sets the maximum amount you will have to pay irrespective of how high interest rates rise. You gain the security of having a 'ceiling' to the amount the lender can increase their interest rates payable on your mortgage. If interest rates fall below the capped level the rate of your monthly payments will fall as well. (The availability of this type of rate can vary).