The number of capped-rate mortgage deals on the market has increased from just one to 39 over the last two years, according to figures from data provider Moneyfacts. Mortgage lenders offering deals of this kind include first direct and Woolwich from Barclays.

However, the interest rates on capped mortgages are typically about 0.50 percentage points higher than equivalent variable rate deals, so are they worth the extra cash?

Capped mortgages work in a similar way to variable-rate deals, apart from that they set a ceiling above which the mortgage rate will not increase.

Borrowers keen to protect themselves against Bank of England base rate rises may therefore find them an attractive option.

But to pay for the security of the cap, mortgage rates on capped deals are typically around 0.50 basis points higher than the equivalent variable rate deal.

While you can pay as little as 1.90% with the market-leading two-year variable-rate deal from ING Direct, for example, the best capped mortgage rate over the same period is currently 2.49% (capped at 4.39%).

However, the base rate would have to increase by a massive 1.90 percentage points within the next two years for the cap to come into force - meaning that those borrowers opting for the capped deal could well end up paying over the odds for no reason.

Michelle Slade at Moneyfacts said: "Capped-rate mortgages appeal to borrowers who want to benefit from a variable rate deal when rates are falling, but worry if rates start to rise sharply.

"But while capped-rate mortgages are a good idea in principle, in the current market borrowers are unlikely to ever hit the cap and would probably be better off choosing a variable-rate deal as a result."

Slade's comments are particularly prescient given that the UK economy is not recovering as well as the Monetary Policy Committee would like, meaning that the base rate is now expected to remain at its current level of just 0.50% until next year.

And with Moneyfacts' figures showing that the cheapest fixed rate deals on the market over two, three and five years are at 2.55%, 3.15% and 3.89% respectively, Slade believes that most borrowers keen to keep their mortgage payments low whatever happens would also be better off with a fix than a cap.

This is because the best two, three and five-year capped rate deals, while currently offering lower rates of 2.49%, 2.68% and 3.20%, only stop rising in line with the base rate once they hit 4.39%, 3.98% and 5.99%.

Borrowers could therefore end up paying more over the longer term as a result, especially if they are looking for a five-year deal.

"If borrowers are concerned about the effect of rising rates on their mortgage repayments then the security of a fixed rate deal would represent a better option," Slade added.