How does an ARM adjustment cap work and how much can my rate increase?

ARM loans in Washington have cap structures that limit how much the rate can change. A common cap structure is 2/2/5 — the rate can't increase more than 2% on the first adjustment, 2% on each subsequent annual adjustment, and no more than 5% total over the life of the loan above the starting rate. If you have a 6% start rate with a 2/2/5 cap, your rate can never exceed 11%. Caps protect you from runaway increases but don't eliminate risk if you hold the loan past the fixed window.