Pass-through rate

From MarketsWiki
Jump to: navigation, search
RCG Division of Marex Spectron-337x80.jpg

A pass-through rate is the interest rate that an investor in a mortgage-backed security receives. It is calculated as the weighted average interest rate on the mortgages underlying the security, less management fees and other related expenses. Because of this, the pass-through rate is lower than the interest rate on the individual mortgages.[1]

References

  1. pass-through rate financial definition. Financial Dictionary.