A payment cap keeps the payments on an adjustable-rate mortgage at a given level or limits the amount to which those payments can rise.

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A payment cap is a feature of some adjustable-rate mortgages (ARMs) that limits the amount by which the borrower's monthly payments can increase, even if interest rates rise. This helps protect borrowers from sudden and potentially unaffordable increases in their mortgage payments.

A Payment Cap Keeps the Payments on an Adjustable-Rate Mortgage