I want to know the difference between CPR and SMM. I've heard these two terms but I'm not sure what they mean exactly and how they differ from each other. Can someone explain it to me?
7 answers
EmeraldPulse
Thu Nov 21 2024
It represents an annual rate that indicates the likelihood of mortgage prepayments.
Valentina
Thu Nov 21 2024
Yet, mortgage payments occur on a monthly basis.
SejongWisdomKeeper
Thu Nov 21 2024
To align with this frequency, we must compute the monthly prepayment rate.
Caterina
Thu Nov 21 2024
SMM serves as this measure.
Carlo
Thu Nov 21 2024
CPR stands for Constant Prepayment Rate.