4.3.3.3 Defining Prepayment Methodologies

The assignment of prepayment assumptions is part of the Create or Edit Prepayment Rule Process where assumptions about loan prepayments or deposit early redemptions are made for product-currency combinations. When you click Save in the Create Prepayment Rules Process, the Rule is saved and the Prepayment Rule Summary Page is displayed. However, prepayment assumptions have not yet been defined for any of your products at this point. Typically, you would start defining your prepay­ment assumptions for product-currency combinations before clicking Save.

The Prepayment Rule supports the definition of prepayment assumptions for combinations of two dimen­sions: Product and Currency.

Once you have created a Prepayment Rule, you can assign prepayment methodologies to product-cur­rency combinations using Node Level Assumption. For more information, see Defining Prepayments Using Node Level Assumptions section.