Early repayment, that is, early repayment, refers to the debtor's early repayment of debts due to the influence of macro-environment and changes in his own income. When prepayment occurs, the amount paid by the debtor is higher than the original monthly planned repayment amount, and the excess will make the outstanding principal repaid in advance. Advance payment can be divided into two situations: partial advance payment and full payment.

What is the prepayment rate?

The prepayment rate refers to the proportion of the amount of debt repaid in advance by the debtor in the personal housing mortgage loan to the outstanding principal balance of the asset pool. Monthly repayment amount and conditional prepayment amount are two basic indicators for calculating prepayment amount.

It is suggested that investors should not only pay attention to the product structure, repayment methods of assets and other factors when choosing RMBS, but also make a reasonable prediction of the prepayment of RMBS, fully consider the prepayment of similar products of the sponsoring institutions, and refer to the overall trend and fluctuation range of prepayment of similar products in the market.

We can consider establishing a database of mortgage securitization prepayment, and make a systematic and comprehensive analysis of prepayment of various products in China's market, so as to avoid the risk of reinvestment caused by underestimation of prepayment and the risk of low pricing of products caused by overestimation of prepayment.