SMM (Single Monthly Mortality)
Asset-Backed Securities glossary · Collateral & Cash Flow Modeling
Definition
Monthly prepayment rate as a percentage of beginning pool balance.
SMM (Single Monthly Mortality) in plain English
SMM is simply the answer to "what fraction of the remaining loans got paid off early THIS month?" If a pool started the month owing $100 and $2 got prepaid ahead of schedule, the SMM is 2%. Investors care because early payoffs return their money sooner than expected, which changes how much interest they'll ultimately earn. It's a monthly speedometer for how fast borrowers are ditching their loans.
Also called: Single Monthly Mortality
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