Resources > Glossary > Periodic Cap

Glossary of Notary Public, Mortgage, Signing Agent, and Loan Signing Terms.

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Common Terms 1   Common Terms 2

Periodic Cap

Phonetics: pe·ri·od·ic cap

Function: adjective

Definition 1:
The maximum rate increase for a specific period for a specific loan in an adjustable rate mortgage (ARM) only. If your current rate is 5% and your periodic cap is 1%, then during the next adjustment, your rate can not be raised to anything higher than 6%.