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Real Estate Glossary


- Life cap

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Life cap
A limit on the amount that a loan rate can move during the term of the mortgage. For example, the rate on an adjustable-rate mortgage that begins at 5 percent and has a lifetime cap of 6 percentage points cannot rise above 11 percent, even if rates on fixed-rate mortgages soar to 20 percent.

Related Terms
Credit life insurance
Capital improvement
Life-cycle cost analysis
Mortgage life insurance

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