Pass-through rate

Pass-through rate

The net interest rate passed through to investors after deducting servicing, management, and guarantee fees from the gross mortgage coupon.

Pass-Through Rate

The interest rate that an investor in a mortgage-backed security receives. It is calculated as the weighted average interest rate on the mortgages underlying the security less management fees and other related expenses. Because of this, the pass-through rate is lower than the interest rate on the individual mortgages.
References in periodicals archive ?
Class X-B is a "strip" IO bond that references class B thru E certificates, with the fixed-rate class B contributing cash flow to the IO; classes C thru E have a weighted average coupon (WAC) pass-through rate and do not contribute cash flow to the IO bond.