DEFINITION of 'Vintage'

A slang term used by mortgage-backed securities (MBS) traders and investors to refer to an MBS that is seasoned over some time period. MBSs typically have maturities around 30 years, and a particular issue's 'vintage' will expose the holder to less prepayment and default risk, although this decreased risk also limits price appreciation.


The underlying loans of certain vintage MBSs have unique characteristics, such as burnout, that make the vintage trade at a premium price. These unique characteristics are a result of how underlying assets in MBS are pooled. Most MBSs pool the underlying assets across certain geographical regions with similar terms to maturity and interest rates. This makes forecasting payment plans more predictable.

  1. Prepayment Risk

    The risk associated with the early unscheduled return of principal ...
  2. Contraction Risk

    The risk faced by the holder of a fixed income security when ...
  3. Extension Risk

    The risk of a security's expected maturity lengthening in duration ...
  4. Default Risk

    The event in which companies or individuals will be unable to ...
  5. Mortgage-Backed Security (MBS)

    A type of asset-backed security that is secured by a mortgage ...
  6. Maturity

    The period of time for which a financial instrument remains outstanding. ...
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