A callable swap in which the seller has the right, but is not obliged, to cancel the agreement on more than two preset dates in the future. Effectively, the swap issuer sells a number of options each of which gives the buyer the right to exercise on a predetermined date if favorable. As such, Bermudan callable swaps provide bigger discounts on the swap rate than normal callable swaps. Such as swap is embedded with several different option dates.

An example may involve a 10-year swap which allows the seller to terminate it at the end of the fourth year and thereafter at semiannual intervals up till maturity date. In case interest rates start to work against the seller (rates are increasing), the swap can be canceled without having to pay any compensation to the buyer.

A swap that comes only with one early termination date is known as a multi-callable swap.