Swap Unwind Cost Calculator

Swap unwinds lock in mark-to-market.

Swap notional

Swap fixed rate %

Current curve rate %

Remaining years

Unwind cost (PV)

$1,076,258

Annual fixed-floating diff

$300,000

Rate diff %

0.01%

How the math works

Annual diff = notional × (fixed − floating). PV = sum of discounted annuals over remaining.

$30M × 1% × 4 yr PV at 4.5% ≈ $1.08M unwind cost. Swap is underwater — pay dealer to terminate.

How to Use

Enter swap notional.
Enter swap fixed rate %.
Enter current swap curve rate %.
Enter remaining years.
Read PV of unwind.

Frequently Asked Questions

Swap mechanics?

Borrower pays fixed, receives floating (SOFR). Net: effectively fixed-rate loan. Unwound = dealer terminates contract, pays/collects PV of remaining cash flows vs current curve.

Calculation?

Fixed rate vs current swap curve over remaining term × notional, discounted. Simplified: notional × (fixed − curve) × remaining years × discount factor. Dealer's model is more complex: credit adjustment, forward curve.

Tax treatment?

Unwind gain: ordinary income typically. Loss: deductible but may be limited by passive activity rules. Consult tax advisor. Material dollar events — plan around tax year and offsetting positions.

How do insurance carriers view this?

Insurance carriers underwrite per-peril and often stack deductibles — named storm, wind, hail, flood, and standard can all apply separately on a single event. Confirm with your broker which deductibles actually apply to your policy and stress-test liquidity against the highest applicable deductible. Endorsements and riders can modify base terms; read declarations carefully and keep a written summary on file for claim time.