{"id":3116,"date":"2017-09-08T08:26:37","date_gmt":"2017-09-08T12:26:37","guid":{"rendered":"https:\/\/www.zolo.ca\/news\/?post_type=encyclopedia&#038;p=3116"},"modified":"2017-11-22T11:26:03","modified_gmt":"2017-11-22T16:26:03","slug":"cap-rate","status":"publish","type":"encyclopedia","link":"https:\/\/www.zolo.ca\/blog\/glossary\/cap-rate","title":{"rendered":"Mortgage Cap Rate"},"content":{"rendered":"<p>A mortgage cap rate is the maximum allowable interest rate a lender can charge on a pre-existing <a href=\"https:\/\/www.zolo.ca\/blog\/glossary\/mortgage\">mortgage<\/a> contract. Cap rates on mortgages are typically only used in variable rate mortgage contracts and in convertible mortgage contracts (where borrowers can opt to switch from a <a href=\"https:\/\/www.zolo.ca\/blog\/glossary\/variable-interest-rate\">variable<\/a> to a fixed rate within the mortgage contract term).<\/p>\n","protected":false},"author":3,"template":"","meta":[],"class_list":["post-3116","encyclopedia","type-encyclopedia","status-publish","hentry","encyclopedia-tag-mortgage"],"acf":{"custom_title":"What is a mortgage cap rate?","why_important":"<p>The mortgage cap rate is the highest interest rate that can be charged by your lender on a variable-rate or hybrid mortgage loan. The inclusion of a cap rate in the mortgage contract\u00a0allows you to reduce the risk of potentially rising rates, as it prevents your mortgage rate from rising above this specified rate. It&#8217;s a cap as it restricts how high a lender can raise your rate during the active mortgage contract term.<\/p>\n","examples_of":"<p>Historically, convertible mortgage allows a borrower to start off with a slightly higher mortgage rate than variable mortgages, but slightly lower than fixed mortgage rates. When negotiating the terms of a convertible mortgage, the lender would offer a mortgage cap rate\u2014the highest rate that could be charged to the borrower should they opt to convert from a variable to a fixed rate.<\/p>\n<p>Convertible mortgages and any mortgage with a cap rate help borrowers who are unsure as to whether or not mortgage rates will rise in the near future, but still want to take advantage of low mortgage rates.<\/p>\n"},"_links":{"self":[{"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/encyclopedia\/3116","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/encyclopedia"}],"about":[{"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/types\/encyclopedia"}],"author":[{"embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/users\/3"}],"wp:attachment":[{"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/media?parent=3116"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}