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Glossary Term: CAP

Definition(s) for CAP:


1. ) A cap is a financial contract giving the owner the right but not the obligation to borrow a pre-set amount of money at a pre-set interest rate with a pre-set maturity date. An upper limit on the interest rate to be paid on a floating-rate note.

2. ) a limit, such as that placed on an adjustable rate mortgage, on how much a monthly payment or interest rate can increase or decrease

3. ) See Net debit cap.


See Also:
CAP RATE, INTEREST RATE CAP, RESET CAP


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