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Floor feature, but this is primarily for Non-Conforming (aka Sub-Prime or Program Lending) loan products. This prevents an ARM loan from ever adjusting lower. An "A Paper" loan typically has either no Floor or 2% below start. Initial Change Cap - ARM loans 1st mortgage sherwood a specified maximum first adjustment that is typically higher than allowed on subsequent changes. Periodic Change Cap - The maximum interest rate adjustment for every subsequent 1st mortgage sherwood adjustment. Life Cap (Ceiling) - The maximum upwards adjustment of an ARM loan. Typically on first mortgages no more than 6% Crucial Information About Caps Loan caps provide payment protection 1st mortgage sherwood payment shock. Most First Mortgage loans have a 5% or 6% Life Cap. Higher risk products, such as Monthly Adjustable loans with Negative amortization and Home Equity Lines of Credit aka HELOC have different ways of structuring the Cap than a typical 1st mortgage sherwood Lien Mortgage. First Lien Caps with no Negative amortization Most First Mortgage loans have a 5% or 6% Life Cap. If the adjustment period is 6 months or 1 year ( the two most common periods on the market), then it takes anywhere from 2-4 maxiumum upward adjustments to reach this cap Negative amortization ARM caps See the complete article for the type of ARM that NegAM loans are by nature. Most of them are Monthly Adjustable ARMs 1st mortgage sherwood the 1st mortgage sherwood cap or ceiling is simply expressed as a maximum rate, usually 9.95% or 10.95% these days. Beware though, some of these loans have 14-16% ceilings, you have to ask . . . . The fully indexed rate is always listed on the statement, but