CPR

CPR

Constant (or Conditional) Prepayment Rate – the standard measure of Prepayments in Australia. CPR is the amount of Principal prepaid in excess of scheduled repayments expressed as an annualised percentage. The CPR is typically estimated based on historical prepayment rates for similar assets. However, it is important to note that the actual prepayment rate may vary from the estimated CPR. This is because prepayment rates can be affected by a number of factors, such as interest rates, economic conditions, and borrower characteristics.

In Australian English, constant prepayment rate is also known as constant prepayment speed.

Here are some examples of constant prepayment rates in securitisation:

• A securitisation of mortgages might have a CPR of 20%. This means that it is estimated that 20% of the principal balance of the mortgages will be prepaid each year.
• A securitisation of credit cards might have a CPR of 10%. This means that it is estimated that 10% of the principal balance of the credit cards will be prepaid each year.