An interest rate swap or currency swap that has a net present value of zero (NPV=0). Generally, the two legs have equal values at the outset. That is:

NPV = PV (fixed leg) + PV (floating leg) = 0

This is usually ensured by applying a spread on one side of the transaction (if the floating leg is LIBOR flat, then it is the fixed leg that is adjusted with as spread). If the fixed coupon is high, then the margin spread added to the floating rate is also high, and vice versa, in order to be certain that the two legs have the same economic value. As long as a given swap does have a zero present value, then it is said to be on-market swap. With the passage of time, marking swaps to market will help pinpoint any differences in the values of two legs.