MORTGAGE DURATION
\mˈɔːɡɪd͡ʒ djʊ͡əɹˈe͡ɪʃən], \mˈɔːɡɪdʒ djʊəɹˈeɪʃən], \m_ˈɔː_ɡ_ɪ_dʒ d_j_ʊə_ɹ_ˈeɪ_ʃ_ə_n]\
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Length of a mortgage, typically in years, unless some principal pre-payment occurs. For an asset that is not property, it can be the number of years until an investor receives the initial present value from a security backed by the mortgage. In this case the longer the mortgage duration is, the more the secured asset value declines as interest rates rise, and, conversely, as interest rates fall the more the asset's value rises.
By Henry Campbell Black
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dust storm
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