The cap fits with TSB

THE TSB's two-year capped rate mortgage is available for endowment, pension or repayment mortgages. Homebuyers start paying at 7.5 per cent and the rate will not rise any higher before January 1995 - but it can always go lower if rates drop. Existing endowment or pension policies are acceptable. Insurance is not compulsory.

So the 7.5 per cent capped rate beats 7.5 per cent fix, except that the fixed rate has no fee. Abbey National has just launched its first capped rate at 8.85 per cent until July 1995 with a pounds 250 fee. For a long-term fix the TSB has five years at 8.2 per cent with a fee of pounds 195 on endowment or repayments mortgages. The redemption penalty is three months interest during the fix.