What is Break Even Payment Rate?

The prepayment rate of an MBS coupon that will produce the same cash flow yield (CFY) as that of a predetermined benchmark MBS coupon. Used to identify for coupons higher than the benchmark coupon the prepayment rate that will produce the same cash flow yield (CFY) as that of the benchmark coupon; and for coupons lower than the benchmark coupon the lowest prepayment rate that will do so.