Your best friend has applied for a mortgages. Your friend asks you the meaning of "interest is capped at 2%/5%. You explain that... The loan has a 2 percent lifetime cap rate and a 5 percent annual cap rate. The loan has a 2 percent annual cap rate and a 5 percent lifetime cap rate. The loan has a 2 percent annual cap rate and a 5 percent floor cap rate. The borrower can choose the cap he wants by circling the appropriate choice