# Ceiling

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Related to absolute ceiling: combat ceiling

## 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.

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 ?
At the theoretical absolute ceiling (which is unattainable in practice), performance collapses to a single point--only one combination of power and speed would be capable of sustaining wings-level flight.
Each loan will be for a maximum of five years and its principal may not exceed 30% of the loss in turnover, with an absolute ceiling per firm of BEF 50 million (Euro 1,239,467) and a minimum of BEF1 million (Euro 24,789).The public-sector guarantee scheme is compatible with state aid rules, the Commission having in other cases already concluded that the nature and extent of the restrictions that must be imposed to protect public health following the dioxin crisis affecting food and animal feed produced in Belgium constituted an exceptional occurrence within the meaning of Article 87(2)(b) of the Treaty.
"Section 12 will allow the application of the Consumer Price Index and a discretionary application of not greater than 10% in any one year - provided that the absolute ceiling of 70 cent is not exceeded."

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