Constant Maturity

Constant Maturity - The constant maturity takes place when there is a quoted return, or yield, on a financial instrument, that is fixed and it involves comparing the instrument in question with other financial instruments that are also fixed, but that have different maturities, which is the given date the debt become due for payment. By doing this comparison the investor can look at various securities and compare their numbers to each other, as long as they all have the same maturity date attached to them. These are often used when mortgage rate calculations are required, as it is a good measure.