production rate

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Production rate

Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Production Rate

The highest interest rate payable on mortgage-backed securities guaranteed by the Government National Mortgage Association (Ginnie Mae). The current production rate is usually half a point less than what the homeowners are paying in interest on their mortgage. For example, if homeowners whose mortgages back the securities are paying 6% on their mortgages, the maximum interest payable is almost always 5.5%. See also: Ginnie Mae Pass-Through.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

production rate

The coupon rate of interest at which pass-through securities issued by Ginnie Mae are issued. The production rate is set 0.5% below the maximum rate permitted on residential mortgages that are insured by the Federal Housing Administration. See also Ginnie Mae pass through.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
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