What is Cap rate?

Whenever you apply for a mortgage and there’s a Capped Rate set then that means that’s the max amount of money what you’ll be paying on your mortgage, this percent might be fixed for a few years like 1-3. Interest rates are always changing increase and decrease periodically. When the rate goes above the predetermined capped rate then your only paying the capped rate.

This way you don't have to worry about the rate going above the roof and you can enjoy the decreasing rate. For example it works like this the capped rate is set on 3.5% now if the interest rate reaches and goes above this limit you only have to pay 3.5%. But if the rates go under the amount then you pay that percentage. The ceiling is predetermined but the bottom isn't.