Ceiling

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Ceiling

The highest price, interest rate, or other numerical factor allowable in a financial transaction.

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.

Ceiling.

If there is an upper limit, or cap, on the interest rate you can be charged on an adjustable-rate loan, it's known as a ceiling.

Even if interest rates in general rise higher than the interest-rate ceiling on your loan, the rate you're paying can't be increased above the ceiling.

However, according to the terms of some loans, lenders can add some of the interest they weren't allowed to charge you because of the ceiling to the total amount you owe. This is known as negative amortization.

That means, despite a ceiling, you don't escape the consequences of rising rates, though repayment is postponed, often until the end of the loan's original term.

Ceiling can also refer to a cap on the amount of interest a bond issuer is willing to pay to float a bond. Or, it's the highest price a futures contract can reach on any single trading day before the market locks up, or stops trading, that contract.

ceiling

(1) The uppermost surface of a room or space. When a lease makes all improvements “below ceiling”the responsibility of the tenant,one must ask if “ceiling”means the concrete bottom of the floor above,or if it means the suspended grid system with ceiling tiles.The space in between the two is called the plenum.All the wiring,plumbing,and ductwork go through the plenum,so the choice of which surface is the “ceiling”could mean a substantial difference in tenant responsibilities.

(2) An upper limit on something,such as the IRS ceiling of $1,000,000 worth of home mortgage debt for which one can deduct mortgage interest.

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 the rate caps expired, electricity would be provided at prevailing market rates for generation.
Originally, the colonies imported English law, which included an interest rate cap statute called the Statute of Anne.
5] This study compares data from 1996-97, the year before the spending freeze and two years before the tax rate caps took effect, to data from 1999-00.
The only limitation on the interest deduction wi be the interest rate cap imitations specified in Sec.
Purchasing interest rate caps would provide the collateral manager another option to mitigate the interest rate risk that arises with the addition of fixed rate assets.
In denying customers any share of savings, the PUC apparently accepted FirstEnergy's argument that the merger benefited customers because FirstEnergy provided power to Met-Ed and Penelec at the generation rate cap price, which in recent years has been lower than market prices.
In May, the PA PUC began a process to develop policies to reduce the risk of significantly higher electric prices for Pennsylvania customers following the expiration of rate caps.
The act extended rate caps first put in place in 1998 by the company's settlement with the State Corporation Commission.
Our goal is to help customers manage their bills when rate caps expire.
The Company uses interest rate caps as a means to reduce its exposure to rising interest rates on its variable rate revolving credit facility.
Allegheny Power's plan will gradually transition its residential customers from capped generation rates to market-based generation rates, while at the same time preserving for customers the benefit of previous rate caps.