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  Periodic Payment Rate Cap Definition
Periodic Payment Rate Cap When you have an adjustable rate mortgage, the maximum amount that your monthly payments can go up or down during a single adjustment period is referred to as your periodic payment rate cap. A periodic payment rate cap may result in a negative amortization of your mortgage if interest rates were to rise to the point where your monthly mortgage payment were not enough to pay both the principal and interest required to fully amortize your loan.

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