Are You a Legal Professional?

FINDLAW LEGAL DICTIONARY

The FindLaw Legal Dictionary -- free access to over 8260 definitions of legal terms. Search for a definition or browse our legal glossaries.

Cap

cap

a limit, such as one placed on an adjustable rate mortgage, on how much a monthly payment or interest rate can increase or decrease, either at each adjustment period or during the life of the mortgage. Payment caps do not limit the amount of interest the lender is earning, so they may cause negative amortization.



Source: U.S. Department of Housing and Urban Development