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Weighted Average Remaining Term - WART

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Definition of 'Weighted Average Remaining Term - WART'

The remaining life of an asset-backed security or a mortgage-backed security. It is measured in months, and is used to denote the remaining maturity of the mortgages or assets that comprise a pool. The weighting factor used in calculating this average is the balance of each mortgage loan in the pool. Also known as weighted average maturity.
Investopedia Says

Investopedia explains 'Weighted Average Remaining Term - WART'

The weighted average remaining term is affected by prepayments of the mortgages included in the mortgage-backed security. Therefore, if prepayment is high, the weighted average remaining term would decrease. The prepayment rate measures how quickly home owners pay off their mortgage, a metric which depends on market interest rates.

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