Single Monthly Mortality Rate

Overview


The single monthly mortality rate is a rate that specifies what percentage of outstanding loans in a pool will prepay in any given month.
{% = SMM \times (BB_t - SP_t) %}
where
  • {% BB_t %} is the beginning mortgage balances for the {% t %} th month.
  • {% SP_t %} is the sceduled principal payment for the month

{% SMM %} is defined to be a percentage.

Contents