Definition of "Life of loan cap"

Stacy Tilley real estate agent

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Stacy Tilleyelite badge icon

Remerica United Realty-Brighton

An upper limit on the interest rate that can be charged in a variable rate mortgage over its life. For example, a variable rate loan is initially offered at 7% loan rate, and its interest rates can be adjusted every three months up to a loan cap of 11%, or 400 basis points.

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