Market value quoted for a mortgage-backed security, typically expressed per $100 of principal.
MBS price is the market value quoted for a mortgage-backed security, commonly expressed as dollars per $100 of principal.
MBS price matters because a lender’s expected sale proceeds change when the market value of mortgage cash flows changes. Many rate sheets therefore respond to agency MBS prices rather than moving only when a lender chooses a new retail rate.
Borrowers often hear that MBS are up or MBS are down. Stronger MBS prices can support better loan pricing, while weaker prices can pressure rates or points higher. The relationship is not one-for-one because lender margins, servicing value, hedge costs, loan features, capacity, and lock terms also matter.
MBS price and yield generally move in opposite directions, but mortgage prepayment options make the relationship more complex than for a simple bond. Different coupons can react differently to the same rate move.
Borrowers encounter MBS price indirectly when a lender reprices a rate sheet, explains intraday market movement, or discusses why a quoted rate changed before lock.
The term becomes practical when connecting a borrower’s Rate Lock to the broader To-Be-Announced Market and agency MBS pricing environment. Once a valid lock is in place, the lock agreement governs the borrower even though market prices continue moving.
A price of 100 is par, a price above 100 is a premium, and a price below 100 is a discount. For an existing pass-through security, current principal generally reflects the original face amount multiplied by its Pool Factor:
The simplified market value is:
Accrued interest, settlement adjustments, pay-ups, and transaction terms can affect the actual amount exchanged.
| Term | What it describes |
|---|---|
| MBS price | Market value of the security |
| MBS Coupon | Security-level rate label |
| Current Coupon in MBS | Market-implied coupon area near current production |
| Mortgage Rate Sheet | Lender-facing grid that turns market inputs into borrower pricing |
A security has $1,000,000 of original face, a 0.82 pool factor, and a price of 101.25. Its current principal is $820,000, and the simplified market value is:
The $10,250 premium is measured over current principal, not the original $1 million face. A lender translating live TBA prices into a borrower rate sheet still applies its own execution and loan-level adjustments.
MBS price differs from MBS Coupon because price is the market value of the security, while coupon is the stated rate label.
It differs from Current Coupon in MBS because current coupon describes a market-implied coupon area, while MBS price is the actual price of a specific coupon or security.
It also differs from Note Rate because note rate is written into the borrower’s loan, while MBS price is a market value for investor cash flow.