Cap

This Issue in United States

Cap (interest Rate) in relation to Home Equity Lines of Credit

In this context, a definition of Cap (interest Rate) is provided: A limit on the amount that your interest rate can increase. Two types of interest-rate caps exist. Periodic adjustment caps limit the interest-rate increase from one adjustment period to the next. Lifetime caps limit the interest-rate increase over the life of the loan. By law, all adjustable-rate mortgages have an overall cap.

Cap

Concept of Cap in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): Carry (Net financing cost)

Resources

See Also

• Derivatives Contract