Negative amortizing loans are designed to stabilize your payment at the expense of the loan balance. By capping the payment adjustment rather than the interest rate, you will always control your cash flow, and the lender will collect all their interest (no interest rate caps), though not necessarily until you sell your home or pay it off years from now. See information about payment caps.

The margins tend to be rather attractive (low risk to the lender). If the interest rates rise to the point that your payment does not cover the interest due, any unpaid interest will get added to you loan balance. Eventually, you will pay this off.