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 'instrument') which is secured by a mortgage or collection of mortgages. The mortgages are aggregated and sold to a group of individuals (a government agency or investment ba ...

that defines the

average In ordinary language, an average is a single number taken as representative of a list of numbers, usually the sum of the numbers divided by how many numbers are in the list (the arithmetic mean). For example, the average of the numbers 2, 3, 4, 7, ...

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

loan In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that d ...

s in a pool weighted by remaining

principal balance The principal balance, in regard to a mortgage or other instrument of debt, is the amount due and owed to satisfy the payoff of an underlying obligation, sans interest or other charges. Amortized mortgage loans automatically pay a portion of eac ...

. 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 N ...

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