The borrower pays the floating rate or the capped rate, whichever is the cheaper on each applicable interest payment date:

• When the floating rate is lower than the capped rate, the borrower pays the floating rate.
• When the floating rate is higher than the capped rate, the borrower pays the capped rate.

Capped loans are created by combining normal floating or fixed rate loans with caps or floors, as shown in the capped loans table below.

The calculator shows the capped loans that can be created from an existing fixed and/or floating rate loan.

How to use the calculator:

• Enter the interest rate of the underlying fixed or floating rate loans.
• Select parameters (amount, duration etc.) for the capped loan.
• Sort the table of alternative capped loans as required (e.g. by minimum or maximum rate).
• Click on “More info” for fuller details of each alternative.

Detailed instructions can be found here.