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Definition

Average life

Average life weighted average of the maturities of various loans or bonds after taking into account agreed amortization’s.


 

Average life also referred to as the weighted-average life (WAL). The average number of years that each dollar of unpaid principal due on the mortgage remains outstanding. Average life is computed as the weighted-average time to the receipt of all future cash flows, using as
the weights the dollar amounts of the principal paydowns.

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