interest rate cap


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Interest rate cap

An interest rate agreement in which payments are made when the reference rate exceeds the strike rate. Also called an interest rate ceiling. Related: Interest rate floor.

Ceiling

The maximum interest rate that may be charged on a contract or agreement. For example, an adjustable-rate mortgage may have an interest rate ceiling stating that the rate will not go over 9% even if the formula used to calculate the interest rate would have it do so. An interest rate ceiling reduces the risk of the party paying the interest. It is also called an interest rate cap. See also: Interest Rate Floor.

interest rate cap

In an adjustable-rate mortgage, a ceiling on the amount the interest rate may increase during any described period,such as one year,or over the lifetime of the loan.

References in periodicals archive ?
In response to ASIC's concerns, Fast Easy has agreed to refund all affected consumers in Queensland, New South Wales and the Australian Capital Territory any amounts paid in brokerage fees above the state-based interest rate caps of 48% by November 2014.
When interest rate caps were scrapped in our state in 1999, the legislative history shows that the Legislature expected interest rates to go up to only 20 to 25 percent.
4 billion in states that enforce reasonable interest rate caps.
We will continue to pursue additional opportunities for further interest rate protection, as we believe the interest rate caps provide an excellent opportunity for us to manage our exposure to potential increases in the prime rate during 2002", concluded Kitchin.
This year's second quarter net income excluding the impact of the mark-to-market of interest rate caps and share-based compensation was USD59.
First quarter 2008 net Income excluding non-cash charges relating to the mark-to-market of interest rate caps and share-based compensation was US$59.
Because 29 other states have imposed interest rate caps similar to Oregon's, it seems likely that the industry will adapt and continue to exist in this state, as it has elsewhere.
Most of the loans have a life of seven years and interest rate caps that range from 2.
NEW YORK -- A proposed extension of interest rate caps currently in place for Tenzing CFO S.
Second quarter 2009 net income excluding the impact of the mark-to-market of interest rate caps and share-based compensation was $39.
4m compared to the second quarter of 2007, excluding the effect of mark-to-market of interest rate caps and share-based compensation this was USD58.
Earnings per share excluding non-cash charges related to the mark-to- market of interest rate caps and share-based compensation are determined by dividing the amount of net income excluding such charges by the average number of shares outstanding for that period.