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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 ?
Take out the floor mats so the entire serving area can be sweep and mopped with warm water and a capful of bleach.
GHB Overview Chemical Gamma-Hydroxybutyric Acid Street Names Cherry Menth, Easy Lay, Gamma 10, GBH, Georgia Home Boy, GHB, G-Juice, Great Hormones, Grievous Bodily Harm, G-Riffick, Liquid E, Liquid X, Salty Water, Scoop, Soap, Somatomax, Vita-G Appearance Colorless, odorless, slightly salty liquid or white powder Administration Oral ingestion Cost $5-$20 per dose (capful or ounce)
Once it has fizzed, she makes the whole room smell amazing by pouring a capful of her favourite Zoflora disinfectant down the plug and leaving it for five minutes.
Continue feeding them once a week with a soluble feed -- 'One' fertiliser is good for potted plants -- a capful in 10 litres of water will feed several pots.
Using 1 capful of bleach per 1 gallon of water that's warmed to about 110 degrees (substitute liquid dish soap or the recommended dilution of Tek-Trol), immerse each egg for a few seconds, and then air-dry.
It makes for a calming and soothing bath (careful, you only need a capful).
Get it from Topof themop Flash All-Purpose Cleaner with Febreze Freshness One capful of this liquid plus a big bucket of water was all I needed to give the kitchen floor a spring clean.
Once or twice a day I put a capful in my mouth, swish around and expel (don't swallow it).
"Some gardeners swear by adding a capful of vodka or gin to the water, or dissolving an aspirin in the water."
It says a capful but I just pour it around a little."
The court heard Wright poured a capful of the clear liquid from a small bottle into the woman's glass and into his.