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Break even payment rate |
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Break even payment rateThe prepayment rate of an MBS coupon that will produce the same cash flow yield (CFY) as that of a predetermined benchmark MBS coupon. Used to identify for coupons higher than the benchmark coupon the prepayment rate that will produce the same cash flow yield (CFY) as that of the benchmark coupon; and for coupons lower than the benchmark coupon the lowest prepayment rate that will do so.Break even payment rate Similar MatchesStop paymentStop paymentAn order given a depository institution not to pay out cash for a check; often used when the check has been stolen or lost. Late paymentLate paymentA payment a lender receives after the due date has passed. Repayment mortgageRepayment mortgageA mortgage where throughout the term, regular payments (usually monthly) are made to partly repay interest on the capital and to partly repay the capital itself (the amount of the loan).Initially the largest proportion of the repayments will be used to pay interest since the capital amount outstanding is at its highest value. Therefore over the initial years the capital will not reduce very much. However as the years proceed more and more of the monthly repayments will be applied to reducing the capital until towards the end of the term the large proportion will be paying off capital and a small proportion paying interest.In the event that interest rates rise then often the monthly repayments will rise accordingly. Alternatively, to keep the same monthly repayments the term will need to be extended. If interest rates fall then the reverse applies. It is usually a requirement of the lender (that is, a building society or bank) providing the mortgage that the borrower takes out life assurance so that repayment is made in the event of his/her death during the term. Payment CapPayment CapA maximum amount for a payment under an Adjustable Mortgage Loan, regardless of the increase in the interest rate. If the payment is less than the interest alone, negative amortization is created. Standard payment calculationStandard payment calculationA calculation that is used to determine the monthly payment necessary to repay the balance of a home loan in equal installments. Further SuggestionsClearing House Automated Payments System (CHAPS)Optional payment bond Balance of payments adjustment mechanism Progress payments Graduated Payment Mortgage Repayment plan Prepayment penalty Balance of payments equilibrium Micropayment Balance of payments Immediate payment annuity Prepayment speed Repayment mortgage Prepayment penalty Balance of payments argument for protection Periodic payment plan Balloon Payment Periodic payments Payment holiday Payments pattern balance of payments Facilitating payment Payment default Additional principal payment Balloon Payment |
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