Interest rate cap

The limit on how much the interest rate on an adjustable rate mortgage (ARM) can go up or down

Most ARMs have two types of interest rate caps:
(1) lifetime caps, which are required by law, that limit the increase and decrease of a rate over the full course of a loan. A 6% lifetime cap, for example, means the rate cannot go beyond 6 percentage points over or under the initial rate
(2) periodic caps, which limit the rate change from one adjustment period to the next, even if the market interest rates significantly rise or fall during this time. A lifetime cap is also referred to as aceiling or floor.

See: Cap