# weighted-average maturity

## Weighted Average 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 constitutes. 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 in 10 years. The weighted average remaining maturity is calculated as:

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

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

## weighted-average maturity

A valuation of mortgage loans pooled into a mortgage pass-through security and calculated by multiplying the amount of the mortgage that is outstanding by the weighting of the remaining number of months to maturity for each mortgage loan in the pool.
References in periodicals archive ?
However, the fund is exposed to securities rated 'BBB(twn)' and is subject to a regulatory maximum weighted-average maturity of 180 days, so Fitch has decided to affirm the fund's rating at 'AA+f(twn)' in line with its criteria, which takes into account the actual and prospective weighted-average credit quality of the underlying portfolio.
However, the fund is exposed to securities rated 'BBB(twn)' and is subject to a regulatory maximum weighted-average maturity of 180 days, so Fitch has decided to affirm the fund's ratings at 'AA+f(twn)' in line with its criteria, which takes into account the actual and prospective weighted-average credit quality of the underlying portfolio.
However, the fund is exposed to securities rated 'BBB+(twn)' and is subject to a regulatory maximum weighted-average maturity of 180 days, so Fitch decided to affirm the fund's rating at 'AA+f(twn)' in line with its criteria, which takes into account the actual and prospective weighted average credit quality of the underlying portfolio holdings.

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