This is the maximum acceptable increase for a specified amount of time on an adjustable-rate mortgage. Caps are a risk management tool that serves as protection against increasing interest rates, all the while maintaining the ability to engage in beneficial rate movement.
Cap
This is the maximum acceptable increase for a specified amount of time on an adjustable-rate mortgage. Caps are a risk management tool that serves as protection against increasing interest rates, all the while maintaining the ability to engage in beneficial rate movement.