Tag Archives: Closed Formula

Fast Formulas #3: Pool Average Life with CPR Prepayments

Fast Formulas #2: Average Life of Mortgage (Amortizing with Balloon) presented a compact formula for calculating the average life of a mortgage that pays as scheduled until it is paid off with a “balloon” payment before the scheduled end of its term.  It occurred to … Continue reading

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Fast Formulas #2: Average Life of Mortgage (Amortizing with Balloon)

Fast Formulas #1: Average Life of Mortgage (as Scheduled) showed a quick way to calculate the weighted average life (“WAL”) of a fixed-rate mortgage that pays as originally scheduled.  I found this formula (which is probably not original) by substituting the standard  level … Continue reading

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Fast Formulas #1: Average Life of Mortgage (as Scheduled)

The weighted average life (“WAL”) of a mortgage is the average time until principal is repaid.  It is also the average amount of time that the principal is outstanding.  Recall that for a standard fixed-rate mortgage with level payments, the principal … Continue reading

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