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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 ?
To reduce this risk, NSSP procedure should be augmented by applying the upper limit of the estimated 90th percentile of fecal coliform samples at the .
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).
11, corresponding to an upper limit for the branching ratio between 35 keV and 100 keV of 6.
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.
This textbook, though, discusses only a simplistic situation that does not involve earnings thresholds or upper limits on bonuses.
Upper limits exceeding the maximum loss and negative deductible levels do just as well.
Elkies of Harvard University published a way to modify Delsarte's method to produce upper limits for the density of any sphere packing in dimensions 8 and 24.
While the use of a Recommended Dietary Allowance (RDA) or arbitrary multiples of RDAs to set upper limits for vitamin and mineral supplements has been seen by some governments as convenient, RDA- based upper limits have no scientific validity and consequently should have no role in determining safety or upper limits.
A separate law governing interest levels, the Interest Rate Control Law, stipulates different upper limits.
A number of subtle physical processes, including chromatic and polarization mode dispersion, four-wave mixing and self-phase modulation set the upper limits for the data carrying capacity of any fibre system.
Nonlinear indemnity schedules with upper limits also characterize nonproportional reinsurance treaties, such as those protecting primary insurers against liability claims and catastrophic property losses.