10.7.10 Prepayment Model Method

The Prepayment Model method allows you to define more complex prepayment assumptions compared to the other prepayment methods. Under this method, prepayment assumptions are assigned using a custom Prepayment model.

You can build a Prepayment model using a combination of up to three prepayment drivers and define prepayment rates for various values of these drivers. Each driver maps to an attribute of the underlying transaction (age/term or rate) so that the cash flow engine can apply a different prepayment rate based on the specific characteristics of the record.

Note:

All prepayment rates should be input as annual amounts.