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Weighted Average Remaining Maturity

   Also found in: Acronyms 0.04 sec.
Weighted average remaining maturity
The average remaining term of the mortgages underlying a MBS.

Weighted Average Remaining Maturity
The average amount of time remaining before maturity in the mortgages underlying a mortgage-backed security, weighted by the percentage of the MBS that each mortgage makes. For example, suppose a mortgage-backed security contains two mortgages, one worth $10,000 and one worth $20,000, for a total of $30,000. The $10,000 mortgage matures in five years, and the $20,000 mortgage matures in 10 years. The weighted average remaining maturity is calculated as:

WARM = ($10,000 / $30,000) * 5 years + ($20,000 / $30,000) * 10 years = 8 1/3 years

The weighted average remaining maturity is also known as the weighted average maturity.


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