An asset swaption in which the buyer pays fixed and receives floating, while the seller, of course, pays floating and receives fixed. This asset swaption involves the exchange of an agreed reference rate and the rate on an asset underlying the swap. For example, a bank holding fixed-income securities or fixed-rate mortgages and expecting lower medium-term interest rates can take a long position in a pay-fixed asset swaption (i.e., buys a pay-fixed asset swaption).

The opposite of a pay-fixed asset swaption is a pay-floating asset swaption (or receive-fixed asset swaption).

This swaption is also called a payer asset swaption.