WAM. The average maturity of all mortgages held in a mortgage-backed security. It is calculated by taking the value of each mortgage, dividing it by the total value of all mortgages (which finds the weight), and then multiplying that value by the number of years left on the mortgage. For example, a mortgage-backed security comprised of a $5000 note due in 2 years and a $2000 note due in 3 years has a weighted average maturity of ($5000/$7000)*2 + ($2000/$7000)*3, or 2.28. A high WAM means that the mortgages comprising the security will not mature for a long time.

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