---
title: What is a cap?
description: "A limit on the amount your interest rate can increase on an adjustable-rate mortgage (ARM). There are two types of caps: periodic adjustment and lifetime."
---

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# What is a cap?

## A limit on the amount your interest rate can increase on an adjustable-rate mortgage.

An interest-rate cap limits the amount your interest rate can increase on an [adjustable-rate mortgage](https://www.jvmlending.com/glossary/#adjustable-ratemortgageorarm) (ARM). **There are two types of caps: a periodic adjustment cap and a lifetime cap.** A **periodic adjustment cap** limits the rate’s increase from one adjustment period to the next. A **lifetime cap** limits the rate increase over the life of the loan. **All ARMs must have a lifetime cap.**

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