Definition of “cap and collar” - English Dictionary

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“cap and collar” in Business English

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cap and collarnoun [ S ]

uk us

BANKING, FINANCE an agreement in which a financial organization puts an upper (= the cap) and a lower (= the collar) limit on an interest rate for a loan, a share price, etc.:

When interest rates are expected to rise, a cap and collar mortgage becomes more attractive to borrowers.

(Definition of “cap and collar” from the Cambridge Business English Dictionary © Cambridge University Press)