Patent cliff and Prepayment risk: Difference between pages
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Prepayment risk is a form of interest rate risk for a financial institution. | |||
It arises from the non-contractual early repayment by customers of, for example, fixed rate mortgages. | |||
The financial institution therefore has an interest rate exposure for the - as yet unknown - prepayments by customers of its fixed interest rate product. | |||
== See also == | == See also == | ||
* [[ | * [[Extension risk]] | ||
* [[ | * [[Interest rate risk]] | ||
* [[ | * [[Option risk]] | ||
* [[ | * [[Pipeline risk]] | ||
* [[ | * [[Prepayment]] | ||
* [[RMBS]] | |||
[[Category: | [[Category:Manage_risks]] | ||
Revision as of 14:39, 2 November 2016
Prepayment risk is a form of interest rate risk for a financial institution.
It arises from the non-contractual early repayment by customers of, for example, fixed rate mortgages.
The financial institution therefore has an interest rate exposure for the - as yet unknown - prepayments by customers of its fixed interest rate product.
