What is a cap premium?

It's the one-time, upfront cost to buy the rate cap. Our Chatham Rate Cap Calculator shows this cost in three ways: as a percentage of your loan size, as a total cash amount, and as an easy-to-compare cost per $1 million.

How does volatility affect the price?

Think of volatility as the market's uncertainty. More uncertainty means a higher price for the cap. Our Chatham cap pricing tool lets you test low, medium, and high volatility settings to see the impact.

Is the price from this tool a firm quote?

No. This Chatham rate cap estimator is for planning and comparison only. For a firm price and to actually trade, you will need a live quote from a dealer.

How do I compare a cap to a swap or collar?

Look at the 'break-even bps/yr' from our Chatham financial calculator. This gives you an annual cost. You can then compare this number directly to the cost of a swap or a collar to find the cheapest option for you.

What is 'cost per $1M' for?

It makes comparison easy. It scales the total price down to a cost for every $1 million of your loan. This lets you compare quotes for different loan sizes quickly and fairly.

What if my strike rate isn't listed?

Our Chatham pricing tool will estimate a price based on the closest strikes available. For a strike rate far from the list, your best bet is to use the nearest one here and then get a formal market quote.

How often should I update the numbers?

You should update them whenever market conditions shift. A good rule is to check at least once a month. If rates are moving fast, you may want to update it more often.

Can I put this calculator on my company's website?

Yes, you can embed this Chatham rate cap estimator. You will need to host the file and keep its internal pricing data current. For live, firm prices, you would need to connect it to a market data feed.

Chatham Rate Cap Calculator — Instant Cap Pricing

Use the Chatham Rate Cap Calculator to estimate cap premiums, cost per $1M, and breakeven bps.

Fast, accurate cap pricing guidance for finance teams.

Estimate cap premium as a % of notional & cost per $1M. Inputs accepted with commas and optional decimals.

Use this Chatham Rate Cap Calculator to quickly estimate cap premiums, cost per $1M notional, and break-even bps per year. Built for treasury, corporate finance, and lenders, this cap premium estimator turns market inputs (term, strike, volatility, and current rate) into actionable pricing guidance so you can compare hedging options fast.

A Smarter Way to Price Interest Rate Caps

Floating rates can be a worry. An interest rate cap is a clear, simple fix. It protects you from rising rates but lets you keep your upside.

To use caps well, you need to know their cost. Our pricing tool gives you a fast, reliable estimate. It shows the premium as a percent of your loan size. Then, it turns that number into a real cash cost. It even shows your annual cost in basis points. This is your break-even point.

We use a smart model that blends current market data. This gives you a consistent number you can trust.

Why You’ll Love This Tool

Get Answers Fast: Need a quote for your budget or an RFP? Get an instant estimate.
Compare Vendors Easily: See the cost for every $1 million. Now you can compare offers fairly.
Gain Key Insight: See your upfront cost as a yearly fee. This helps you weigh caps against swaps or your own risk.

How to Get the Most from the Calculator

This tool gives you a ballpark figure for your planning. It is not a live market quote.

For actual trades, you will need a firm price from a dealer. Remember to keep the pricing table fresh, as market data changes daily.

A quick testing tip: Run simple checks. See how the price changes if you adjust the volatility or shift the strike rate by 25-50 bps. This shows you how sensitive the premium is to market moves.

How to use the Chatham Rate Cap Calculator (step-by-step)

Enter Notional — Type the notional amount (commas allowed). Example: 10,000,000.
Select Term — Choose the cap tenor (1, 2, 3, 5, 7, 10 years). Longer terms typically cost more.
Enter Current Rate (reference) — Input the current floating reference (e.g., 4.50). This is for context and break-even math.
Set Cap Level / Strike — Enter the strike you want to cap (e.g., 5.00). The calculator interpolates between available strikes in the pricing table.
Choose Volatility — Pick Low / Medium / High to reflect implied vol environment; higher vol → larger premium.
Calculate — Click Calculate. Outputs show: cap premium (% of notional), total USD cost, cost per $1M, and break-even bps/yr.
Interpret — Use cost per $1M and bps/yr to compare to alternatives (swaps, collars, or natural hedge). Run sensitivity by adjusting strike and vol.

Quick tips:

If the strike is outside the table range, the calculator uses the nearest available price.
For decision-making, compare premium (bps/yr) to your forecasted floating exposure to check cost-effectiveness.

Frequently Asked Questions

Q1: What is a cap premium?
It’s the one-time, upfront cost to buy the rate cap. Our Chatham Rate Cap Calculator shows this cost in three ways: as a percentage of your loan size, as a total cash amount, and as a easy-to-compare cost per $1 million.
Q2: How does volatility affect the price?
Think of volatility as the market’s uncertainty. More uncertainty means a higher price for the cap. Our Chatham cap pricing tool lets you test low, medium, and high volatility settings to see the impact.
Q3: Is the price from this tool a firm quote?
No. This Chatham rate cap estimator is for planning and comparison only. For a firm price and to actually trade, you will need a live quote from a dealer.
Q4: How do I compare a cap to a swap or collar?
Look at the “break-even bps/yr” from our Chatham financial calculator. This gives you an annual cost. You can then compare this number directly to the cost of a swap or a collar to find the cheapest option for you.
Q5: What is “cost per $1M” for?
It makes comparison easy. It scales the total price down to a cost for every $1 million of your loan. This lets you compare quotes for different loan sizes quickly and fairly.
Q6: What if my strike rate isn’t listed?
Our Chatham pricing tool will estimate a price based on the closest strikes available. For a strike rate far from the list, your best bet is to use the nearest one here and then get a formal market quote.
Q7: How often should I update the numbers?
You should update them whenever market conditions shift. A good rule is to check at least once a month. If rates are moving fast, you may want to update it more often.
Q8: Can I put this calculator on my company’s website?
Yes, you can embed this Chatham rate cap estimator. You will need to host the file and keep its internal pricing data current. For live, firm prices, you would need to connect it to a market data feed.
Q9: How can I help people find this page online?
Use clear, natural phrases throughout your page. Good terms include Chatham Rate Cap Calculator, rate cap pricing tool, interest rate cap cost estimator, and break-even bps calculator. This helps users find the resource they need.