That's neat but how does one hedge a $800k loan with a max position of $25k? Idea seems spurious. The difference is substantially higher. Compare a pre-hike 2.8% with a present 6.8%. Your $25k hedge is going to be pointless.
It's 25k downside exposure limit (doesn't mean your upside is capped at 25k).
Also even if you can't hedge the exposure in its totality, it is still worth hedging a fraction of it. "Under-hedging" is a common term in commodities markets - people often want to cover a portion of their exposure and leave the rest in the hands of mother nature.
