An agreement to change interest rate exposures from floating to fixed or vice versa. There is no exchange of the principal, but only the interest cashflows.

An agreement to pay or receive a sum of money calculated by reference to the difference between a floating rate of interest and a fixed rate of interest, based on a notional principal sum. This definition relates to a plain vanilla swap, which is the simplest form of interest rate swap available.

An arrangement that requires both sides of the transaction to make payments to each other based on two different interest rates. The most commonly traded requires one side to pay a fixed rate and the other to pay a floating rate.

If you are earning variable interest on money you have deposited at your bank, but you are worried that interest rates will drop in the future, you can change your investment to earn a fixed rate of interest. This will protect you from falling interest rates and it is called an interest-rate swap.

Swapping of fixed interest rate commitments against floating ones or vice versa on normally identical capital sums with matching currencies.

An exchange of two debt obligations that have different payment streams. The transaction usually exchanges two parallel loans; one fixed the other floating.

An agreement to swap interest rate exposures from floating to fixed or vice versa. There is no swap of the principal. It is the interest cash flows be they payments or receipts that are exchanged.