Interest rate swap

Interest rate swap fixes the interest rate on a loan

An interest rate swap is suitable for a customer who wants to know the interest rate expenses of the next years in advance and hedge against potential rise in the interest rate level.

An interest rate swap is used to fix the interest rate on variable-rate loans, or loans linked to Euribor rates. An interest rate swap is a contract between the bank and the customer, in which the customer typically pays an interest linked to a fixed interest rate to the bank, and the bank pays the customer an interest linked to a variable interest rate. Hence, the customer in practice ends up paying a fixed interest on its loan instead of a variable interest.

How does your business benefit from an interest rate swap?

• Hedge against a rise in the interest rate level and certainty over the amount of the monthly payment on a loan.
• The fixed interest rate remains the same over the entire contract period.
• A single interest rate swap can be used to hedge a single loan or several loans.