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An upper limit on the interest rate on a floating-rate note (FRN) or an adjustable-rate mortgage (ARM). Also, an OTC derivatives contract consisting of a series of European interest rate call options; used to protect an issuer of floating-rate debt from interest rate increases. Each individual call option within the cap is called a caplet. Opposite of a floor.


1. Informal for market capitalization.

2. In a floating-rate note or an adjustable-rate mortgage (ARM), the highest possible interest rate. For example, if one has an adjustable-rate mortgage on a house, the interest rate fluctuates periodically. However, if the homeowner has a cap on the interest rate, there is a guarantee that it will never rise above a certain percent, no matter what the ARM formula would otherwise dictate. A cap is designed to protect the person or company making the interest payments. See also: Floor, Collar.


1. An upper limit on the interest rate to be paid on a floating-rate note.


A cap is a ceiling, or the highest level to which something can go.

For example, an interest rate cap limits the amount by which an interest rate can be increased over a specific period of time. A typical cap on an adjustable rate mortgage (ARM) limits interest rate increases to two percentage points annually and six percentage points over the term of the loan.

In a different example, the cap on your annual contribution to an individual retirement account (IRA) is $4,000 for 2006 and 2007 and $5,000 in 2008, provided you have earned at least that much. If you're 50 or older, you can make an additional catch-up contribution of $1,000 each year.




A ceiling on the adjustments that can be made in the payments or interest rate of an adjustable-rate loan.


Same as Float-Down.

References in periodicals archive ?
And it's a two in one - you can use it outside the bath as a moisturiser as well as putting a capful in the bath to relax in.
To sanitize, pour a capful of bleach into your bucket, fill it with water, let it sit for a half an hour, then dump out and rinse with cold water.
It's easy to use - just add a capful to every litre of water when watering the tree, which in warm and centrally-heated rooms can mean daily.
The court heard Wright poured a capful of the clear liquid from a small bottle into the woman's glass and into his.
The company is trying to encourage consumers who measure detergent by the capful to use more, according to Greg Tipsford, senior vice president, laundry care.
5cm (one inch) fresh ginger, peeled and chopped one medium onion, finely chopped two red chillies, de-seeded and chopped juice of one lime salt and pepper to taste 250g (8oz) potatoes,boiled and mashed with a little cream,seasoning and butter one capful white wine vinegar two bay leaves a few peppercorns one tablespoon olive oil plus oil for shallow frying 100g (4oz) fresh white breadcrumbs For the salsa: one cucumber finely diced one red chilli, de-seeded and finely choppedone bunch coriander, finely chopped four tablespoons icing sugar
To do this, spread a capful or two of bleach onto the surface of the wood and scrub.
In institutional settings such as child care centers, washing objects and surfaces with a dilute bleach solution (made by mixing 1 capful of chlorine-containing household bleach with 1 gallon water) can be a very effective way to inactivate the virus.
At the inquiry McKenna said he had given Deerfield Sunset a routine capful of sherry in the week before the Derby final.
If you'd prefer to earn alcohol's remarkable protective services from a bottle of beer or capful of vodka, they say, drink up.
The directions say to put this in the washing machine's drawer but it worked better when I poured a capful straight into the drum.