Derivation of one particular variable, allows to limit the risk of future rate increases. The borrower follows the benefits of varying stages of decline in the cost of money, but in case of upward and suffers the disadvantages to a certain limit defined cap.
This loan combines the characteristics of the typical financial product to those of securities of a derivative (option).

The variable rate mortgage a rate constant

With this type of product combines features of fixed-rate with those of the variable rate. By varying the interest rate changes the term of the mortgage, but not the rate (which remains constant). Increases the cost of money results in an extension of the deadline, reducing the rebates.