In past posts I showed you how to calculate a Constant Prepayment Rate (CPR) with an amortization schedule. This post will allow you to compare a CPR rate to a model provided by the Public Securities Association (PSA). PSA is based upon the CPR calculation. Both use a Single Monthly Mortality (SMM) calculation. The difference is that the PSA is not one prepayment rate, like the CPR, but a series of ramped CPR rates, depending on the maturity of the mortgage.  The rational is that new mortgage holders are less likely to move, refinance, or be able to afford additional payments.

The PSA model was designed for 30-year pooled mortgages. The standard model is a CPR that starts at .2 for the first month, .4 for the second month, .6 for the third month and so on until the 30th month, where it hits a 6 CPR. The CPR then stays at 6 until the end of the mortgage. This is referred to as the standard 100% model. On my spreadsheet the 100% model is entered as 100. The CPR rates for the 100% PSA model are charted below:

 A 150 PSA starts at a .3 CPR, then .6, then .9, until it gets to a 9 CPR, and stays there:

A 50 PSA starts a .1 CPR and goes to a 3 CPR:

When pooling 30-years mortgages that are less than 30 years remaining, the PSA calculation must shift to compensate for the months already past. For example, if the pool has a WAM of 357 months, the PSA calculation will start with the CPR for the forth month and move up from there.  This seasoning is incorporated in my calculations.

The input is exactly the same as the workbook on servicing with CPRs, but with this sheet the CPR cell has a ComboBox alongside that allow you to choose PSA or CPR.

Remember, CPR and PSA are not entered as a percent!!


Download workbook “PSA” from:

Downloads Written in Excel 2013

Don Pistulka
Don Pistulka

Retired Credit Union CFO - Finance
Background: over 40 years in investments, asset/Liability management, banking, securities trader.
Worked for: California Credit Union, WesCorp, CalFed S&L, Crocker Bank, Carroll McEntee, Federal Home Loan Bank Board (D.C.), Western Asset Management, Security Pacific National Bank.


  1. […] Last November I posted an amortization spreadsheet that allowed for variable interest rates on mortgages. I used that spreadsheet and added a CPR variable. That way you can create your own CPR model, rather than using one CPR for the full term or using the PSA model. […]

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