The weighted-average loan age (WALA) is measure used in pools of

mortgage-backed securities A mortgage-backed security (MBS) is a type of asset-backed security (an "Financial instrument, instrument") which is secured by a mortgage loan, mortgage or collection of mortgages. The mortgages are aggregated and sold to a group of individuals ( ...

that defines the

average In colloquial, ordinary language, an average is a single number or value that best represents a set of data. The type of average taken as most typically representative of a list of numbers is the arithmetic mean the sum of the numbers divided by ...

number of months since the date of note origination of all the

loan In finance, a loan is the tender of money by one party to another with an agreement to pay it back. The recipient, or borrower, incurs a debt and is usually required to pay interest for the use of the money. The document evidencing the deb ...

s in a pool weighted by remaining

principal balance The principal balance, in regard to a mortgage, loan, or other debt financial contractual agreements, is the amount due and owed to satisfy the payoff of an underlying obligation. It is distinct from, and does not include, interest In finance ...

. In the calculation each loan's size is in proportion to its aggregate total of the pool. The measure are often used by organisations buying or selling securitized mortgages, like

Fannie Mae The Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, is a United States government-sponsored enterprise (GSE) and, since 1968, a publicly traded company. Founded in 1938 during the Great Depression as part of the New ...

in the United States. It helps investors estimate the amount of time before the whole pool is repaid. This number will fluctuate as mortgages in the pool are paid off. The main counterpart to the weighted-average loan age is the Weighted Average Maturity rate.

References

Loans {{finance-stub