Interest rate (EIR) in securitisation is the actual interest rate that an investor pays on a securitisation. It is calculated by taking into account the interest rate on the underlying assets, any fees or costs associated with the securitisation, and the expected losses on the underlying
assets.
The EIR is important for investors to consider because it can be significantly higher than the interest rate that is advertised on the securitisation. This is because the EIR takes into account all of the costs and risks associated with the securitisation.