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weighted average maturity

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.

Related information about weighted average maturity:
  1. Weighted Average Maturity (WAM) Definition | Investopedia
    The weighted average of the time until all maturities on mortgages in a mortgage- backed security (MBS). The higher the weighted average to maturity, the longer ...
     
  2. Weighted Average Maturity - Financial Dictionary - The Free Dictionary
    The weighted average maturity of an MBS is the weighted average of the remaining terms to maturity of the mortgages underlying the collateral pool at the date ...
     
  3. What is weighted average maturity? definition and meaning
    Definition of weighted average maturity: WAM. The average maturity of all mortgages held in a mortgage-backed security. It is calculated by taking the value of ...
     
  4. Weighted Average Maturity - WAM: Definition from Answers.com
    also called average life or weighted average life and used in mortgage-backed pass-through securities meaning the weighted-average time to the return of.
     
  5. Weighted-average life - Wikipedia, the free encyclopedia
    Weighted Average Maturity (WAM): WAM is an average across several loans, and applied to pools of mortgages, instead of an average of principal repayments ...
     
  6. weighted average maturity - Invest Definition
    weighted average maturity definition: The average time it takes for securities in a portfolio to mature, weighted in proportion to the dollar amount that is invested ...
     
  7. Weighted average maturity
    The Weighted average maturity (WAM) of a MBS is the weighted average of the remaining terms to maturity of the mortgages underlying the collateral pool at the ...
     
  8. What Is Weighted Average Maturity?
    Weighted average maturity is a term most commonly applied to mortgage-backed securities, which are a type of derivative investment made up of many ...