Definition of "Life of loan cap"

Regina Ramalheira real estate agent
Regina Ramalheira, Real Estate Agent Coldwell Banker Residential Brokerage

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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