# Ceiling

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Related to Rate Cap: payment cap

## 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 ?
There is no doubt that when the rate cap was announced one year ago, it met with a good deal of public approval as rampant interest rates before then had priced local capital out of the reach of the majority of small traders in the country.
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.
Because the only amount that can be spent to purchase the option is 4% of original premium, the price of the options determines how high the rate cap can be set.
These results are most likely attributable to increased state aid to school districts that corresponded with the implementation of the property tax rate cap mandated by LB1114.
Kenya's leading banks are better placed than their smaller competitors to manage the fall in profitability and rise in loan impairments likely to arise from proposed new rate caps, Fitch Ratings says.
The FCC's careful review showed that a modest increase in the rate caps set in 2015 is warranted.
The industry has argued that the 36 percent rate cap--the federal rate cap for loans to active-duty military personnel--would drive it out of the state.
The only limitation on the interest deduction wi be the interest rate cap imitations specified in Sec.
NEW YORK -- According to Fitch Ratings, a proposed supplemental indenture by Petra Capital Management LLC (Petra), the collateral manager for Petra CRE CDO 2007-1 (Petra 2007-1), to allow for an increased concentration of rated securities and to allow the purchase of interest rate caps with principal proceeds will not in itself impact the rating of the notes.
Small savers whose accounts were converted to transaction accounts by banks in the wake of the interest rate caps are unlikely to be affected.
Victorian councils have indicated that if not for the rate cap they would have continued to increase rates at a similar rate many to try and make up for the Federal Governments cuts since 2014.
15 to 1, 80 percent loan-to-value on unrestricted rents and a rate cap, this program will be a welcome addition to the affordable housing industry.

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