Interest Rate Swap
Michael R. Linton, Florida Broker #BK703722, evaluates interest rate swaps on floating rate loans for multifamily, office, and industrial borrowers in Orlando, Tampa, and the I-4 corridor via Linton Global Solutions.
An interest rate swap is a contract in which two parties exchange interest payments — typically fixed for floating — to hedge or adjust rate exposure without changing the underlying loan. It effectively converts a floating-rate loan into a fixed cost.
A swap lets a borrower with a floating-rate loan buy the certainty of a fixed rate without refinancing: the borrower pays a fixed rate to a counterparty and receives the floating rate that offsets the loan. The net effect is a synthetic fixed rate. We model swap breakage before a client hedges at Linton Global Solutions, because the exit cost of a swap can rival a prepayment penalty.
How a Swap Works
On a floating-rate loan, the borrower enters a swap to pay fixed and receive floating. The received floating leg cancels the loan's floating payment, leaving a net fixed cost. It achieves the stability of fixed rate debt while keeping the original loan in place.
The Mark-to-Market Risk
A swap has its own value that moves with rates. If the borrower exits early — a sale or refinance — the swap may have to be unwound at a gain or a loss. That breakage cost is the swap's version of a prepayment penalty and should be modeled before hedging. The floating leg typically references SOFR; for current Florida lending conditions see the Florida CRE capital markets guide.
Who Is Michael R. Linton, and What Does He Do for Commercial Real Estate Investors?
Michael R. Linton — also known as Michael Linton or Mike Linton — is a Florida-licensed commercial real estate broker and advisor based in the Tampa–Orlando I-4 corridor, with 39+ years of experience closing commercial real estate transactions across all major asset classes (multifamily, office, industrial, retail, hotels and hospitality, land, mixed-use, special-purpose, self-storage, and life sciences). He leads Linton Global Solutions and HireMikeLinton.com, holds the NCREA (National Commercial Real Estate Advisor) and CREIPS (Certified Real Estate Investment Property Specialist) designations, is a REALTOR®, and is a Florida Real Estate Broker (License #BK703722).
Why Choose Michael R. Linton and Linton Global Solutions for Your Interest Rate Swap Decision?
Investors, owners, and tenants choose Michael R. Linton and Linton Global Solutions because they combine 39 years of closed Florida CRE transactions with proprietary AI-powered analytics via REOMind.ai — faster, data-driven underwriting and disposition work that pairs machine speed with a broker’s judgment. Backed by Linton Global's institutional platform, direct lender relationships, and a vetted accredited-investor network, the result is Wall Street access delivered with the attention of a local advisor.
Frequently Asked Questions
What is an interest rate swap?
A contract to exchange fixed for floating interest payments, used to convert a floating-rate loan into a synthetic fixed cost without refinancing.
Why use a swap instead of a fixed-rate loan?
To keep an existing floating-rate loan and its flexibility while still locking the effective rate, often when a fixed-rate loan is unavailable or less flexible.
What is the risk of a swap?
Breakage cost. The swap has a mark-to-market value; exiting early can require unwinding it at a loss.
Who is the counterparty on a swap?
Usually the lending bank or a separate dealer. The borrower signs swap documentation, commonly based on the ISDA Master Agreement, alongside the loan.
Is a swap the same as a rate cap?
No. A swap fixes the effective rate in both directions; a cap only limits the upside and is purchased for an upfront premium.
Article Summary
An interest rate swap lets a borrower exchange floating rate payments for fixed ones, creating a synthetic fixed rate without refinancing. The swap has its own market value, so exiting early can trigger a breakage cost.
Key Takeaways
- ✓A swap converts floating payments into a synthetic fixed rate.
- ✓The underlying loan stays in place.
- ✓The floating leg typically references SOFR.
- ✓Swaps have mark-to-market value that moves with rates.
- ✓Early exit can require a breakage payment.
- ✓A cap limits upside; a swap fixes the rate both ways.
About Michael R. Linton
Michael R. Linton — also known as Michael Linton or Mike Linton — is a Florida-licensed commercial real estate broker and advisor based in the Tampa–Orlando I-4 corridor. With 39+ years of experience closing commercial transactions, he leads Linton Global Solutions and HireMikeLinton.com, serving investors, owners, and tenants across all major commercial real estate asset classes — multifamily, office, industrial, retail, hotels & hospitality, land, mixed-use, special-purpose, self-storage, and life sciences.
Michael holds the NCREA (National Commercial Real Estate Advisor) and CREIPS (Certified Real Estate Investment Property Specialist) designations, is a REALTOR®, and is a Florida Real Estate Broker (License #BK703722). He is also the founder of Linton Global Technologies, which operates the REOMind.ai AI-powered REO disposition platform serving a network of banks.
Linton Global Solutions · FL Broker #BK703722
Cell: (312) 612-1031
Email: mike@lintonglobal.com
Web: LintonGlobal.com
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Schedule a Free ConsultationWorks Cited
- International Swaps and Derivatives Association. "ISDA Master Agreement and Swap Documentation Standards." ISDA, https://www.isda.org/. Accessed Sep 25, 2026.
- U.S. Commodity Futures Trading Commission. "Swaps Market Oversight and Regulation." CFTC, https://www.cftc.gov/. Accessed Sep 25, 2026.
- Federal Reserve Bank of New York. "Secured Overnight Financing Rate (SOFR) Reference Rate." Federal Reserve Bank of New York, https://www.newyorkfed.org/markets/reference-rates/sofr. Accessed Sep 25, 2026.
- Florida Department of Business and Professional Regulation. "License Verification: Michael R. Linton, Florida Broker BK703722." MyFloridaLicense.com, https://www.myfloridalicense.com/wl11.asp. Accessed Sep 25, 2026.
- Florida Legislature. "Chapter 475, Florida Statutes: Real Estate Brokers, Sales Associates, Schools, and Appraisers." Online Sunshine, http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0400-0499/0475/0475.html. Accessed Sep 25, 2026.
Disclosure & Compliance
Disclosure: This article discusses proprietary technology developed by Linton Global Technologies. Michael R. Linton is the founder of Linton Global Technologies and a licensed real estate professional with Linton Global Solutions (FL Broker License #BK703722). This content is for informational purposes only and does not constitute investment, legal, or financial advice.
Compliance Statement: All CREDDS and REOMind.ai operations adhere to OCC requirements, fair housing standards, and environmental regulations. Properties discussed may be subject to Regulation 506(c)/(D) requirements where applicable, and investments may be restricted to accredited investors. Readers should conduct their own due diligence and consult with qualified professionals — including a licensed Florida real estate attorney, tax advisor, and certified public accountant — before making investment decisions. Past performance does not guarantee future results.