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


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.


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.


(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 our revised calculation, to increase sensitivity, both the upper limits of the geometric mean and the upper limits of the estimated 90th percentile are calculated, but only the upper limit of the estimated 90th percentile is used.
The literature has documented that the optimal private insurance contains an upper limit on coverage for the following reasons: price regulation (Raviv, 1979), the insured's option of bankruptcy (Huberman, Mayers, and Smith, 1983), the insured's option for converting or trading the damaged properties (Garratt and Marshall, 1996), or the manipulation of audit cost (Picard, 2000).
Cllr Clein added: "There are dangers in setting an official upper limit on subsidy, because it could increase the tendency to go up to the line.
11, corresponding to an upper limit for the branching ratio between 35 keV and 100 keV of 6.
965(c)(1) term "applicable financial statements," which comes into play when computing the deduction's upper limit.
And then dumb guys who didn't know that that was the upper limit came up with ideas that would take us farther.
The definitized Agreement describes efforts to be completed and establishes an upper limit of $14.
Specifically, 110 mg/dL is the recommended upper limit for glycemia in the intensive care unit.
Previously accepted 'rules of thumb' put 12 PLI as the upper limit for fabric tension from a drying capacity perspective.
This method yielded an upper limit for exposure to each of 8 pesticides representing many that are used heavily in the Salinas Valley, an area of intensive year-round agricultural production.