Cap

The highest point to which an adjustable rate mortgage (ARM) can rise in a given time period or the highest rate that investors can receive on a floating-rate type bond. The issuer typically sets the cap at the time the contract is issued. With an ARM, it is detailed in the terms of the mortgage document.

Homeowners that have adjustable rate mortgages (ARMs), which vary based on an underlying benchmark such as the prime rate, experience a fluctuation in their monthly mortgage interest rates. However, the amount by which the percentage rate on the loan can increase in a given period (typically quarterly) is capped at a certain rate. This is a safeguard for homeowners in case interest rates rise dramatically in a short period of time.


Investment dictionary. . 2012.

Synonyms:

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  • cap — cap …   Dictionnaire des rimes

  • cap — cap·no·di·a·ce·ae; cap·no·di·um; cap·pa; cap·pagh; cap·pa·ri·da·ce·ae; cap·pa·ris; cap·pe·len·ite; cap·pel·let·ti; cap·pie; cap·po; cap·py; cap·ra; cap·ral·de·hyde; cap·rate; cap·ric; cap·ri·cor·nis; cap·ri·dae; cap·ri·fi·cate; cap·ri·fi·ca·tion; …   English syllables

  • cap — [ kap ] n. m. • XIIIe; mot provenç. « tête », lat. caput I ♦ Vx Tête. ⇒ chef. Mod. Loc. De pied en cap [ dəpjetɑ̃kap ] :des pieds à la tête. ⇒ 1. complètement. Armés de pied en cap. II ♦ 1 ♦ (1387) Pointe de terre qui s avance d …   Encyclopédie Universelle

  • Cap — (k[a^]p), n. [OE. cappe, AS. c[ae]ppe, cap, cape, hood, fr. LL, cappa, capa; perhaps of Iberian origin, as Isidorus of Seville mentions it first: Capa, quia quasi totum capiat hominem; it. capitis ornamentum. See 3d {Cape}, and cf. 1st {Cope}.] 1 …   The Collaborative International Dictionary of English

  • CAP-10 — Vue …   Wikipédia en Français

  • Cap 10 — Vue de l avion Type Avion de voltige Motorisation Moteur Lyc …   Wikipédia en Français

  • cap — Cap, m. N est pas naif Francois, Car le Francois dit chef, ce que le Gascon dit Cap, Et l Espagnol Cabo, et l Italien Capo, tous quatre issans du Latin Caput. Et combien qu envers le Gascon ce mot signifie aussi teste, ce neantmoins le Francois n …   Thresor de la langue françoyse

  • Cap — als Abkürzung steht für: Calender Access Protocol, Übermittlungsprotokoll für Kalenderdaten zwischen beliebigen Groupwareservern. CAMEL Application Part: Transportprotokoll aus der Familie des Signalling System 7 für CAMEL Anwendungen in… …   Deutsch Wikipedia

  • CAP — als Abkürzung steht für: CAP (Automobilhersteller), ehemaliger belgischer Automobilhersteller CAP (Markt), eine Supermarktkette betrieben von behinderten/benachteiligten Menschen CAP Customer Advantage Program GmbH, verantwortlich für HappyDigits …   Deutsch Wikipedia

  • Cap 24 — logo de Cap 24 Création 20 mars 2008 Disparition Octobre 2010 Slogan « La chaîne capitale » Langue …   Wikipédia en Français

  • cap — cap1 [kap] n. [ME cappe < OE cæppe & ML cappa < LL cappa, a cape, hooded cloak] 1. any closefitting head covering, brimless or with only a front visor, and made of wool, cotton, etc., as a baseball cap or overseas cap, or of muslin or lace …   English World dictionary

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