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The highest price, interest rate, or other numerical factor allowable in a financial transaction.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.


(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.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
In a study conducted in America, to establish the variability in the upper limit of normal (ULN) for alanine aminotransferase (ALT) across different laboratories, it was found that there is wide variability in ALT ULN across different laboratories11.
For each continuous group, four statistics (geometric mean, estimated 90th percentile, upper limit of geometric mean, and upper limit of estimated 90th percentile) are calculated using the following equations.
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).
"Once the list has been dealt with, the EU will explore the upper limits of vitamin dosage permissible and, later still, it is expected herbal supplements will come under scrutiny," relates the Times.
The BOJ and the government are considering making each bank's interest rate on time deposits the same as the upper limit for ordinary deposits at the same time, the officials said.
The upper limits have been gradually raised due to requests from the Chinese.
The upper limit for supplemental E is 1,000 milligrams of alpha-tocopherol (equivalent to 1,500 IU of natural source d-alpha tocopherol or 1,100 IU of synthetic dl-alpha-tocopherol).
The difference between Windows 3.1 and Win95 is that Win95 can fully use whatever RAM is available on a computer--unlike Windows 3.1, which has upper limits and never can use all the RAM that's available.
Because these bonuses are functions of earnings, and are often not simple functions of earnings (as will be discussed later when thresholds and upper limits are introduced), the necessary output (q) cannot be obtained by merely inserting the bonus expense as part of FC or v.
An example is the missing upper limits for vitamins and minerals, which has been under discussion, both EU-wide and at a national level, for quite some time.
It further argues that the AMP rule ignores the Social Security Act's requirements for establishing Federal Upper Limits on reimbursement for multiple-source drugs.