prepayment speed

Definition

The average rate at which mortgage holders are expected to pay off their loans ahead of schedule. This is used in calculating the value of mortgage pass-though securities.

Use prepayment speed in a sentence

You should always try to make sure that you keep up with the prepayment speed so you can borrow again later.

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The prepayment speed was good for us and I felt like we were paying off our loans in perfect accordance with it.

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The specific set of mortgage-backed securities being sold by this investment advisor were very attractive due to analysis showing a high average prepayment speed.

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