Interest rate swap

An altogether more important point is that the floating rate is something of the form LIBOR + XX b.p.

(LIBOR is the floating element that you hedge out through the Short Sterling spread bet)

This sort of stuff is OTC and certainly in the Interest rate deriv depts I've worked in they wouldn't be interested in anything under $10m. Simply not worth the bother, risk and cost given the low interest rates.

Interest rate risk management: HSBC Bank UK

Let me know if it does what you need

its a bit complicated, but the same principle as someone who has a variable/tracker mortgage/loan at 0.5 % uk base rate, who wants to switch to a fixed rate at as low a rate as possible, the longer the term the better.

thanks for the link but high street banks not at all interested in small retail clients (reasons as per hoggums comments), hence my query here. all the crap on your link must have been written pre summer 2007

In that case you will have trouble doing it yourself. Most (at least that I'm aware of) exchange traded interest rate products involve LIBOR at some point down the line, I can't think of any IR product with the base rate as underlying.

Have you tried calling HSBC? I am looking for the same thing.
They offered me a cap. Something along the lines of I pay £8,000 premium and if the rate goes above 3.5% in the next 3 years they pay the difference. They offered me 5 years out of the money (4.5% I think) for £15,000. This is on a mortgage of £531,000 hence the high premiums. Obviously you loose the premium but you keep the lower payments should rates stay below the swap rate.

So I take it you are worried about hyperinflation and high rates??
What's your opinion on where rates willl go in the next few years?

You might be able to take the caplet route through a SB'er too... or even use options on Gilts which might better reflect your underlying rate (as a function of the base) - but you are getting into proper financial engineering here...

NB: A cap is just a series of caplets, options on interest rates. Also, personally I prefer taking the Gilt route if your floating rate is a function of Base rather than Sterling LIBOR - the reason is that if you are paying base but recieving LIBOR, you are exposing yourself to term-Sterling-TED risk (i.e. the difference in credit quality between AAA contributing banks and the UK G'ment... which is sheer lunacy... unless you are long, which I think you might be here???)