Mortgage pass-through securities in which the cash flow from the underlying mortgages is separated. All principal is diverted into securities that pay only principal back to the investors, while all interest is diverted into securities that pay only interest. The interest-only (IO) and principal-only (PO) securities are used as hedging tools to provide greater stability for mortgage portfolios during periods of fluctuating interest rates.
Barry Goldsmith
| APA | Barry Goldsmith. (2010). stripped mortgage-backed securities. Retrieved October 1, 2026, from http://smartdefine.org/stripped_mortgage-backed_securities/definitions/1164388 |
| Chicago | Barry Goldsmith. 2010. "stripped mortgage-backed securities" http://smartdefine.org/stripped_mortgage-backed_securities/definitions/1164388 (accessed October 1, 2026). |
| Harvard | Barry Goldsmith 2010, stripped mortgage-backed securities, Smart Define, viewed 1 October, 2026, <http://smartdefine.org/stripped_mortgage-backed_securities/definitions/1164388>. |
| MLA | Barry Goldsmith. "stripped mortgage-backed securities" 21 October 2010. Web. 1 October 2026. <http://smartdefine.org/stripped_mortgage-backed_securities/definitions/1164388> |