GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
^
50% - Moderately

Swap


Synonyms:change, exchange, interchange, switch, trade
Filed Under: financial-banking, investments
Tags: banking, investment
 

Definition of swap

swap
1. An agreement between two businesses to exchange commodities, payments or other financial products to reduce the risk of volatile market conditions or to obtain a better price or rate. For example, interest rate swaps, where floating rate interest is exchanged for fixed rate interest, protects a corporation against rises in rates or allows it to take advantage of a better rate. A cross-currency swap enables two parties to enter into an agreement in which one exchanges its currency for the other's to meet their separate requirements.

Related Terms and Acronyms:

  • collusion   A secret, deceitful agreement by two or more parties to defraud others.
  • debt   Money one person or firm owes to another person or firm.
  • derivatives   Financial contracts whose value is derived from the value of some underlying asset, rate or index. Derivatives are used as risk-management tools by governments and corporations to reduce exposure to risk, mainly related to fluctuations in foreign-exchange and interest rates. Derivative instruments include swaps, options, futures and forward contracts and are used by banks in two principal activities: sales/trading and asset/liability management.
  • equity   The value of a property minus outstanding mortgage debt and other liens.
  • exchange   A trade of property for other property or services. Like-kind property exchanges are a popular tax-deferral strategy.
  • loss   When expenses are larger than revenues.
  • profit   When revenues exceed expenses.
  • security   A tradable financial implement that represents ownership, the rights to ownership or debt.
  • stock   A share of the ownership of a company.
  • trade equity   A swap of property, such as real estate or a car, as part of a down payment for other real estate.

More Related Terms and Acronyms

  • bootDefinition

Search the Glossary

Mortgage Rates
Getting a low mortgage rate can mean the difference between you buying your dream home and... just a house. Look no further, apply today and get a great rate on your mortgage.
Mortgage Rates
 
Mortgage Payment Calculator
Find out exactly what you can afford to spend on your new home with our freshly redesigned and easy to use mortgage payment calculator, now with lump sum and pre-payment options, automatically generated graphs, and side-by-side mortgage comparisons.
Compare Mortgage Payments
 
Did you know? The average home loan in Bridgewater is: Discover many more facts and statistics exclusively here at Mortgage Super Brokers.
Nova Scotia