Estimate upfront cap premium for floating-rate loans — Black-76 caplet strip, flat curve.
Estimated cap premium
$160,991 (3.22% of notional)
20 quarterly caplets · Black-76 strip · flat forward & vol
Borrower reference (per period)
- Interest at strike (5.5%)
- $68,750
- Interest at forward (5%)
- $62,500
- Accrual fraction
- 25.00% of notional
Chatham Rate Cap Calculator helps you estimate upfront cap premium for floating-rate loans — black-76 caplet strip, flat curve. It is commonly used by finance teams, founders, individual planners for chatham rate cap calculator, interest rate cap premium, rate cap cost estimator.
What it estimates
An interest rate cap limits how high a floating loan index (e.g. SOFR) can rise. The borrower pays an upfront premium for protection above a strike rate.
This Chatham-style tool sums Black-76 caplet present values across the cap term:
Caplet PV ≈ Notional × accrual × DF × [F·N(d₁) − K·N(d₂)]
using a flat forward rate, flat volatility, and continuous discount rate.
Example (pre-filled)
$5M notional · 5.5% strike · 5% forward · 30% vol · 5-year quarterly cap · 4% discount.
Limits
Does not replace a live dealer or advisor quote. Real pricing uses the forward curve, volatility surface, and day-count conventions. For binding hedges, work with your bank or advisor (e.g. Chatham Financial).
Disclaimer: This calculator provides information only and is not financial, tax, or legal advice.