The following four types of caps may apply to an adjustable-rate mortgage:
Initial adjustment caps - The upper limit of the interest rate increase during the first adjustment.
Subsequent adjustment caps - These limit the amount your interest rate can increase in one adjustment period after the initial adjustment.
Lifetime caps - These limit the amount your interest rate can increase over the life of your loan. Nearly all ARMs have a lifetime cap, according to the Consumer Financial Protection Bureau (CFPB).
Payment caps - These limit the amount your monthly payment can increase at each adjustment.
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