What is interest-rate cap?
A contractual or purchased limit on how high a floating rate can go: periodic caps limit each reset, lifetime caps limit total movement, and commercial floating-rate borrowers often buy caps to protect project cash flow.
Where you will use it: this term comes up in the Real Estate Finance course, and the full course glossary collects every term in one place.
Related terms
From the free Real Estate Finance course by Devon Coombs, CPA, MBA.