Weighted Average Remaining Term - WART

AAA

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 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.

RELATED TERMS
  1. Collateralized Mortgage Obligation ...

    A type of mortgage-backed security in which principal repayments ...
  2. Collateralized Debt Obligation ...

    An investment-grade security backed by a pool of bonds, loans ...
  3. Mortgage Pool

    A group of mortgages held in trust as collateral for the issuance ...
  4. Mortgage-Backed Security (MBS)

    A type of asset-backed security that is secured by a mortgage ...
  5. Weighted Average Maturity - WAM

    The weighted average of the time until all maturities on mortgages ...
  6. Real Estate

    Land plus anything on it, including buildings and natural resources.
RELATED FAQS
  1. No results found.
Related Articles
  1. Bonds & Fixed Income

    Profit From Mortgage Debt With MBS

    Mortgage-backed securities can offer monthly income, a fixed interest rate and even government backing.
  2. Mutual Funds & ETFs

    The Alphabet Soup Of Credit Derivative Indexes

    Find out how these instruments work and how they are used in the market.
  3. Bonds & Fixed Income

    How Bond Market Pricing Works

    Learn the basic rules that govern how bond prices are determined.
  4. Insurance

    Investing In Securitized Products

    Securitized assets are customizable and have a wide range of yields, making them an attractive asset class.
  5. Investing

    Is the Best Plan for Pot Investing 'Wait-and-see?'

    Legalized marijuana is an emerging industry and those interested in investing in it should proceed with caution.
  6. Credit & Loans

    How To Become a Mortgage-Backed Securities Analyst

    Specializing in structured or derivative credit products like mortgage-backed securities requires education and prior experience in the mortgage field.
  7. Mutual Funds & ETFs

    Tired Of Mutual Funds? Try This Alternative

    Mirrored investments services are a beneficial alternative to traditional mutual funds. Discover how they work and how they can be used to your advantage.
  8. Home & Auto

    A Soaring Housing Market: College Apartments

    How to play the boom in upscale student housing.
  9. Investing Basics

    The Strange New World Of The Bitcoin Exchange Futures Market

    We explain the basics of the Bitcoin exchange and futures market.
  10. Forex Education

    The Top Uses For P2P Currency Exchange

    Peer-to-peer (P2P) currency exchange networks offer a viable and cheaper alternative for buying and selling currencies.

You May Also Like

Hot Definitions
  1. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  2. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  3. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  4. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
  5. Investment Grade

    A rating that indicates that a municipal or corporate bond has a relatively low risk of default. Bond rating firms, such ...
  6. Fringe Benefits

    A collection of various benefits provided by an employer, which are exempt from taxation as long as certain conditions are ...
Trading Center