Public Securities Association Prepayment Benchmark (PSA)

In the US, CPR is measured and described against a benchmark called the PSA benchmark.  

The benchmark is expressed as a series of monthly prepayment rates. Based on historical patterns, it is assumed that prepayment rates increase by 0.2% for the first 30 months until they peak at 6%.  

Slower or faster prepayment rates are then referred to as some percentage of the PSA prepayment benchmark.

A PSA of 100 means that the MBS is expected to have prepayment rates that match exactly that of the benchmark.

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