Definitions for **"interest rate cap"**

A provision of an adjustable rate mortgage limiting how much interest rates may increase in a single adjustment period.

A limit on how much a borrower's percentage rate can increase or decrease at rate adjustment periods and over the life of the loan. Interest rate caps are used for ARM loans where the rates can vary at certain points.

Consumer safeguards that limit the amount the interest rate on a variable rate loan can change in an adjustment interval and/or over the life of the loan.

Method of limiting the interest-rate increases of an adjustable rate mortgage (ARM). A periodic rate cap limits how much the interest rate can increase from one adjustment period to the next. A lifetime cap limits the interest rate increase over the life of the mortgage.

An agreement that guarantees to the buyer a maximum interest rate for future borrowing requirements (also known as interest rate ceiling).

The limit on how much an interest rate on an adjustable rate mortgage (ARM) can go up or down.

An option that sets an upper limit on the level of an interest rate. Compensation is payable to the holder of the option if rates exceed the protected level. A premium is required.

A contract whereby the seller agrees to pay the purchaser, in return for an upfront premium or a series of annuity payments, the difference between a reference rate and an agreed strike rate when the reference exceeds the strike. Commonly, the reference rate is three- or six-month LIBOR. An interest rate cap is typically used to protect the purchaser from an increase in market interest rates.

Upper limit set on a variable interest rate.

Caps limit the range that the interest rate on an adjustable rate mortgage can change in an adjustment interval during the term of the loan.

The limit on how much interest rates may increase or decrease per adjustment period as a provision of an ARM.

a rate of return on capital, usually expressed as an annual percentage of the amount loaned or invested.

Also called a Life Cap or Life Rate, it's how much interest rates may increase or decrease per adjustment period or over the life of a mortgage.

The maximum interest rate increase of an adjustable rate mortgage.

a contract that enables customers with floating rate debt to limit or "cap" their exposure to rising interest rates

a derivative in which the buyer received money at the end of each period in which an interest rate exceeded the agreed strike price

an agreement between a buyer (holder) and a seller (writer) of the cap to reimburse the buyer if interest rates rise above a pre-set level (the strike rate) at each rollover date of the underlying bank bill facility

an option that allows a cap purchaser to limit exposure to increasing interest rates on its variable-rate debt instruments

a series of European call options or caplets on a specified interest rate, usually the LIBOR interest rate

A limit to the interest rate increases and decreases on an adjustable rate loan; either from one adjustment period to the next or over the life of the loan.

the maximum amount of interest that can be charged on an ARM loan. Can be expressed in terms of annual or lifetime figures.

A limit on the amount the interest rate on an adjustable rate mortgage may change per year and/or over the life of the loan.

ARM provision limiting the amount interest rates may increase in each adjustment period, or over the life of a mortgage. Also known as Lifetime cap.

A limit on the maximum interest that can be charged on an adjustable-rate loan.

Provision of an adjustable-rate mortgage limiting how much interest rates may increase or decrease per adjustment period or over the life of a mortgage. See also Lifetime Cap.

A limit set on the amount the interest rate can be raised during each adjustment period of an adjustable rate loan.

A provision of an ARM limiting how much interest rates may be increased in a given adjustment period. See also "Lifetime cap."

Periodic caps limit the periodic adjustments, and life caps limit the maximum interest rate allowable on an adjustable rate mortgage.

A provision of an ARM limiting how much interest rates may increase per adjustment period (see also Lifetime Cap)

An option product which limits the holder's interest rate exposure, but still allows the holder to profit from advantageous interest rate movements. One party limits its exposure to interest rate increases to a ceiling by paying a fixed premium, the second party agreeing to pay the excess interest above the ceiling.

For an adjustable-rate mortgage, a limitation on the amount the interest rate can change per adjustment or over the lifetime of the loan, as stated in the note.

the limit on the amount of interest that can be charged on the monthly payment of an adjustable rate mortgage during the adjustment period.

A provision in an Adjustable Rate Mortgage limiting how much interest rates may increase per adjustment period and for the life of the loan.

limits the interest rate or the interest rate adjustment to a specified maximum. This protects the borrower from increasing interest rates.

The maximum interest rate charge allowed on the monthly payment of an adjustable rate mortgage during an adjustment period.

The most the interest rate can adjust for an adjustable rate mortgage at adjustment intervals.

A term relevant to an Adjustable Rate Mortgage (or "ARM"), an interest rate cap limits much your payments can go up. The interest rate cap protects you, the borrower: it determines the maximum number of percentage points the interest rate can increase over the term of the loan. See also Adjustable Rate Mortgage.

An interest rate cap sets an upper limit for a variable interest rate in relation to a notional debt amount. To the extent that the variable interest due on the underlying debt exceeds the cap amount, the holder of the cap receives income as compensation in the amount of the difference to the cap. An up-front premium is paid as consideration for the cap.

The highest possible interest rate a lender can ever charge on an ARM. Select the state in which you wish to find a Real Estate Agent to buy, sell, buy and sell, a home today! Alabama / Alaska / Arizona / Arkansas / California / Colorado / Connecticut / Delaware Florida / Georgia / Hawaii / Idaho / Illinois / Indiana / Iowa / Kansas / Kentucky / Louisiana Maine / Maryland / Massachusetts / Michigan / Minnesota / Mississippi Missouri / Montana / Nebraska / Nevada / New Hampshire / New Jersey / New Mexico New York / North Carolina / North Dakota / Ohio / Oklahoma / Oregon / Pennsylvania Rhode Island / South Carolina / South Dakota / Tennessee / Texas / Utah / Vermont / Virginia Washington / Washington DC / West Virginia / Wisconsin / Wyoming Copyright © 2005-2006 RealEstateLocalSearch.com, ALL Rights Reserved

A limit on the amount to which an interest rate can change on an Adjustable Rate Mortgage (ARM).

the maximum interest rate for a loan or variable rate security, or for an investment, the maximum interest paid

A provision of an ARM limiting how much interest rates my increase in a given adjustment period. See also "Lifetime cap". | | | | | | | | | | | | | | | | | | | | | W | X | Y | Z

A provision of an arm limiting how much interest rates may increase or decrease per adjustment period or over the life of the loan.

A limit on the amount that interest can rise or fall during a specified period of time on an adjustable-rate mortgage.

An agreement that provides the buyer of a cap with a maximum interest rate for future borrowing requirements.

A Consumer safeguard which limits how much the interest rate on an adjustable rate mortgage may change per year and/or the life of the loan.

A clause in an Adjustable or Variable Rate Mortgage which limits the change in the interest rate charged. May limit change within a single adjustment period or over the life of the mortgage.

A limit on how much the interest rate can change, either at each adjustment period or over the life of the loan.

A limit on the maximum interest rate that can be charged during the life of an ARM or on the maximum rise allowed from one adjustment period to the next.

The total number of percentage points that an adjustable-rate mortgage (ARM) might rise over the life of the loan. [] Joint Tenancy An equal, undivided ownership in a property taken by two or more owners. Under joint tenancy there are rights of survivorship, which means that if one of the owners dies, the surviving owner rather than the heirs of the estate inherits the other's total interest in the property. [] Landlord A lessor. One who allows another to occupy his land or building for a consideration.

A limit on the amount the interest rate can increase. A periodic cap limits how much the rate can increase at each adjustment period. A lifetime cap limits how much the rate can increase during the term of the loan.

The maximum interest rate allowed on an adjustable-rate loan for any one adjustment period during the life of the loan.

A provision of an ARM limiting how much interest rate may increase or decrease per adjustment period or over the life of a mortgage.

A limit that is imposed upon interest rate increases and decreases for an adjustable rate loan. The cap or limit can be imposed from one adjustment period to the next or over the entire life of the loan.

A provision of an ARM limiting how much interest rates may increase per adjustment period.- Back To The Top

A boundary or limit on much an interest rate may increase or decrease at rate adjustment periods and throughout the loan term.

Contractual agreement protecting a borrower against a rise in interest rates.

A provision of an ARM that limits how much the interest rate can increase per adjustment period.

The limit placed on the amount that can be charged on a monthly payment on an ARM during its adjustment period.

A provision of an ARM limiting how much interest rates my increase in a given adjustment period. See also "Lifetime cap". Joint tenancy: A form of co-ownership giving each tenant equal interest and equal rights in the property, including the right of survivorship.

The most the interest rate on an ARM can increase or decrease at each adjustment period.

A provision in an ARM that limits the amount that the interest rate may be increased (and in some cases, decreased).

In most cases, the maximum rate of interest that may be charged on an adjustable rate mortgage loan over the life of the loan.

A limit on interest rate increases and/or decreases during each interest rate adjustment or over the term of the mortgage.

Also called an interest rate ceiling, an interest rate agreement in which payments are made when the reference rate exceeds the strike rate.

Consumer safeguards which limit the amount the interest rate on an ARM loan can change in an adjustment interval and/or over the life of the loan. For example, if your per-period cap is 1% and your current rate is 7%, then your newly adjusted rate must fall between 6% and 8% regardless of actual changes in the index.

A safeguard built into a variable rate loan to protect the consumer against dramatic increases in the rate of interest and, consequently, in the monthly payment. For example, a variable rate loan may have a two percentage point limit per year on the amount of increase or decrease, as well as a five percentage point limit (increase or decrease) over the life of the loan.

Loan feature which limits the amount the interest rate can rise on a variable rate loan in any given adjustment interval and/or over the life of the loan.

A safeguard built into ARMs to prevent drastic changes in interest rates.

The most an adjustable rate mortgage can raise within a specified period.

The maximum interest rate that can accrue on a variable rate mortgage.

Maximum interest rate allowed, during an adjustment period, on the monthly payment of an adjustable rate mortgage.

interest rate ceiling interest rate floor

Limit on the amount an adjustable rate mortgage may increase or decrease during specific intervals and over the term of the loan. This safeguard protects the buyer from dramatic changes in monthly payments.

The maximum interest rate increase of an adjustable rate loan. For example: 6% loan with a 5% interest rate cap would have a maximum interest for the life of the loan which would not exceed 11%.

A limit on how much the variable interest rate can increase at any one time. Many real estate loans have both annual (or semi-annual) caps and lifetime caps, which limit the amount your payments can increase in an adjustment period and over the life of the loan.

A derivative instrument which is linked to interest rates.

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