annual cap

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Annual Cap

The maximum amount that an interest rate on an adjustable-rate mortgage may change in a single year. For example, an adjustable-rate mortgage may have an annual cap stating that the rate will not go up more than 1.5% each year. This concept is similar to an interest rate ceiling, but an annual cap does not specify a maximum interest rate. Instead, it limits the speed at which a rate increases.

annual cap

An agreed-upon limit on the amount an adjustable-rate mortgage may increase the interest rate each year.Consumer mortgages usually have annual caps; commercial mortgages usually do not.

References in periodicals archive ?
Ive heard from Rhode Islanders who feel secure that they dont have to worry about lifetime or annual caps, or being denied coverage for a pre-existing condition.
The proposal includes multiple consumer protections, such as annual reconciliations, annual caps, cumulative caps and earnings limits.
The clause, many tenants hope, will protect them from arbitrary rent hikes in the absence of annual caps on rental increases.
330) These states used Missouri's historic preservation tax credit statute as a model for their own and did not impose annual caps on their programs.
The tax credit for cellulosic biofuel production, set to expire at the end of 2012, would be extended for three years, with annual caps on gallons that qualify for the credit.
Insurance companies can no longer impose a lifetime maximum on health care benefits, and annual caps will be phased out over the next three years before being completely eliminated in 2014.
The regulations indicate many plans should be able to retain grandfathered status, but some consumer protections such as no lifetime or annual caps on how much insurers must pay, no matter whether they have grandfathered status, will be required for all plans after Sept.
Many companies have long for-sworn annual caps on most benefits but retained them on what might be considered auxiliary benefits, such as chiropractic care or occupational therapy.
ANNUAL caps to restrict immigration are unnecessary and could have negative effects, Communities Secretary John Denham said yesterday.
Some states offering generous tax credits or rebates can also have very low annual caps on how much money they can actually give away.
The industry uses about 40 methods, most combining the elements of point-to-point, high point, annual reset, monthly or annual caps, monthly or annual averaging, and yield spreads.
These procedures (established by the Budget Enforcement Act (BEA) of 1990 and later extensions) consisted of annual caps on discretionary spending and a pay-as-you-go requirement (i.

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