Consider a hypothetical example in which a 10 billion yen loan is repaid at 2.5 billion yen a year. The notional amount of the swap is reduced to match: 10 billion, 7.5 billion, 5 billion, and 2.5 billion yen. With a fixed rate of 2%, the fixed-rate interest is 200 million, 150 million, 100 million, and 50 million yen. A swap whose notional amount increases over time is called an accreting swap.
Amortizing swap
- Japanese
- 償却型スワップ
- Last reviewed
- September 25, 2026
This is a draft, shown for review before publication.
An amortizing swap is an interest rate swap whose notional amount decreases over the life of the trade according to a schedule set in advance. It is used to fix the interest on a loan that is repaid in installments, with the notional amount matched to the loan balance.