DEFINITION of 'Ceiling'

The maximum level permissible in a financial transaction. Ceiling refers to the highest price, the maximum interest rate, or the largest of some other factor involved in a transaction. For example, the interest rate ceiling on a credit card is the highest interest rate that could be charged for purchases, cash advances, penalty APR, etc. An adjustable rate mortgage (ARM) might include an interest rate ceiling; the maximum interest that the mortgagor would be allowed to pay.


Ceilings are intended to keep prices, interest rates, rents, charges, debts and other financial transactions under certain levels. Examples include bond issuers who may cap the amount of interest they would be willing to pay; investors who attach a price ceiling or limit to a position order; maximum rents allowable for certain properties; or debt ceilings, the amount of debt above which an entity can no longer borrow, as issued by local, state or federal governments.

  1. Limit Order

    An order placed with a brokerage to buy or sell a set number ...
  2. Price Ceiling

    The maximum price a seller is allowed to charge for a product ...
  3. Large Trader

    An investor or organization with trades that are equal to or ...
  4. Debt

    An amount of money borrowed by one party from another. Many corporations/individuals ...
  5. Floor

    The lowest acceptable limit as restricted by controlling parties. ...
  6. Interest Rate Ceiling

    The maximum interest rate that a financial institution can charge ...
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