prepayment risk

listen to the pronunciation of prepayment risk
İngilizce - İngilizce
The risk that when interest rates fall, mortgages will be prepaid, forcing other investors to reinvest at lower interest rates
The possibility that a bond owner will receive his or her principal investment back from the issuer prior to the bond's maturity date
The potential loss due to prepayment by an obligor The SPV may either pass through the prepaid amounts to investors thus resulting into faster payment of principal than expected, and reduced income over time, or if the SPV were to reinvest this money, the reinvestment may not produce rate of return as in the underlying receivables Hence, prepayment is viewed as a risk in securitizations, though sometimes, prepayment penalties may more than undo the damage
~ The risk that falling interest rates will lead to heavy prepayments of mortgage or other loans-forcing the investor to reinvest at lower prevailing rates
The risk that a bond owner will receive his or her principal investment back from the issuer prior to the bond's maturity date
The risk that falling interest rates will lead to heavy prepayments of mortgage or other loans-forcing the investor to reinvest at lower prevailing rates
The risk that a pass-through issue will have an adverse pattern of prepayments
Uncertainty faced by mortgage investors regarding early payment of mortgage principal and interest
The possibility that a bond owner will receive his or her principal investment back, from the bond issuer, prior to a bond's maturity date
~ The risk that falling interest rates will lead to heavy prepayments of mortgage or other loans-forcing the investor to reinvest at lower prevailing rates
The possibility that, as interest rates fall, homeowners will refinance their home mortgages, resulting in the prepayment of GNMA securities, and possible decline in net asset values of GNMA Funds
The risk that, as interest rates fall, borrowers are more likely to refinance their debts As a result, the principal on certain fixed-income securities may be paid earlier than expected, which could cause investment losses and cause prepaid amounts to have to be reinvested at a relatively lower interest rate
Risk that the rate which mortgages are repaid for a pool of mortgages is different than when the MORTGAGE BACKED SECURITY was purchased
prepayment risk

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    pripeymınt rîsk

    Telaffuz

    /prēˈpāmənt ˈrəsk/ /priːˈpeɪmənt ˈrɪsk/