Duration

See Mortgage Loan Duration.


Frequently Asked Questions about Mortgage Loan Duration

Duration refers to “Mortgage Loan Duration,” a measure of the weighted average time it takes to receive all principal and interest payments on a mortgage loan. It helps investors understand a loan’s sensitivity to changes in interest rates.

It is used to assess interest rate risk. A longer duration implies greater sensitivity to rate changes, affecting the loan’s market value and refinancing strategies.

Loan term is the total time over which a loan is scheduled to be repaid (e.g., 10 or 30 years), while duration reflects the average time weighted by cash flows and is typically shorter than the loan term.

It helps investors manage interest rate risk, evaluate refinancing timelines, and anticipate how much value might be gained or lost if interest rates shift.

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