Business and Personal Finance Dictionary

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• CEILING
  
  If there is an upper limit, or cap, on the interest rate you can be charged on an adjustable-rate loan, it's known as a ceiling. Even if interest rates in general rise higher than the interest-rate ceiling on your loan, the rate you're paying can't be increased above the ceiling. However, according to the terms of some loans, lenders can add interest charges comparable to what a jump in rates would have yielded to the total amount you owe. This is known as negative amortization. That means, despite a ceiling, you don't escape the consequences of rising rates, though repayment is postponed, often until the end of the loan's original term. Ceiling can also refer to a cap on the amount of interest a bond issuer is willing to pay to float a bond, and to the highest price a futures contract can reach on any single trading day before the market locks up, or stops trading, that contract.
  
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