The Federal Reserve Board's manual for examiners calls the swap callable when the fixed-rate payer holds the right to terminate and putable when the fixed-rate receiver holds it. It groups both as cancelable swaps and counts them as a type of swaption. A plain interest rate swap may also be closed out before maturity, but then the parties settle an amount based on the market value of the remaining payments (in the manual's example, the party whose market value is negative pays).
Callable swap
- Japanese
- コーラブル・スワップ
- Last reviewed
- October 4, 2026
This is a draft, shown for review before publication.
A callable swap is a swap in which one party, in exchange for a premium, holds the right to terminate the interest rate swap before maturity. Institutions with debt they can repay early use it to avoid a mismatch between the term of the debt and the term of the swap that hedges it.