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Mortgage Glossary

Adjustable-Rate Mortgage Cap

Mike Starr·Reviewed August 2026

An ARM cap is a limit on how much an adjustable-rate mortgage's interest rate can change at any one adjustment period or over the life of the loan. Caps are expressed in three numbers (e.g., 2/2/5): the first limits the initial rate change, the second limits each subsequent change, and the third limits the total lifetime change. Caps protect borrowers from extreme payment increases.