Terminating Your Interest Rate Swap

Contemplating Terminating your Interest Rate Swap?
Here’s Why it Will Likely Cost You

Written by:

Derivative Logic

In decades of advising borrowers of all shapes and sizes, one topic that comes up repeatedly is the best practice for a borrower to terminate an interest rate swap when the underlying loan is paid off early. Has your bank ever told you not to worry, that you can “make money” from your interest rate swap? The following will explain that most of time, it just isn’t so.

Why Terminate an Interest Rate Swap?

  • A change in the credit provider
  • Sale of real estate or other asset
  • A sale of the business


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