What does 200 PSA mean for a mortgage-backed security?

200 PSA means prepayment rates are twice the benchmark: 0.4% CPR in month 1, ramping to 12% CPR by month 30. Higher PSA shortens weighted average life (WAL). At 300 PSA, a 30-year MBS may have WAL of only 5–6 years.

What drives MBS prepayment speeds?

Primary driver is refinancing incentive: when mortgage rates fall 50+ bps below outstanding rate, prepayment speeds accelerate. Secondary factors include housing turnover (mobility speeds), seasoning (months since origination), and burnout (prior refinancing opportunities already taken).

MBS Prepayment PSA Speed Calculation

Model MBS prepayment cash flows using the PSA prepayment speed benchmark: 100 PSA = 0.2% CPR in month 1 ramping to 6% CPR by month 30 and constant thereafter.

Principal ($)

Annual Rate (%)

Years

Compounding / Year

$ Finance Disclaimer: These calculators are for educational and illustrative purposes only. Results do not constitute financial advice. Consult a licensed financial advisor before making investment or borrowing decisions.

How It Works

Model MBS prepayment cash flows using the PSA prepayment speed benchmark: 100 PSA = 0.2% CPR in month 1 ramping to 6% CPR by month 30 and constant thereafter

Each component has a specific meaning:

PSA prepayment speed benchmark: 100 PSA = 0 — The psa prepayment speed benchmark: 100 psa = 0 recorded for the scenario being assessed.

Note: Interpret the mbs psa speed result against the thresholds and context described above.

How to Use

Enter the PSA prepayment speed benchmark: 100 PSA = 0 for the scenario you are assessing. Model MBS prepayment cash flows using the PSA prepayment speed benchmark: 100 PSA = 0.2% CPR in month 1 ramping to 6% CPR by month 30 and constant thereafter. Use the mbs psa speed result to inform your calculation.

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