Last reviewed 08-20-2026Short-Sale.com Editorialglossary
PAYMENT CAP
California Department of Real Estate
Updated 08-20-2026
PAYMENT CAP
With regard to an adjustable rate mortgage, this limits the amount of increase in the borrower’s monthly principal and interest at the payment adjustment date, if the principal and interest increase called for by the interest rate increase exceeds the payment cap percentage. This limitation is often at the borrower’s option and may result in negative amortization.
California Department of Real Estate Glossary
California Department of Real Estate · p. 24
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