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I'm reading "The Handbook of Fixed Income Securities" and have a question about pages 521-523 on Stripped Mortgage Backed (MBS) securities.The book says that if a homeowner decides to sit on a mortgage without making any prepayments (ie- paying just the amount due) then the return on the principal for "Principal Only" investors (PO) will be spread out over the life of the underlying mortgage....I understand that. But the next part is curious:which will result in a lower return for PO investors.How can that possibly be? As long as the mortgage doesn't default, PO investors should get exactly the same return whether it takes 1 second or 1 millenium for a mortgage to be paid off.I'd understand it if the book said "which would result in a lower return _RATE_ for PO investors", since the return is spread out over a long time. But shouldn't the return itself be the same?Thanks!

Maybe the book means lower retrun per month(?)

If you look at it in terms of time value of money, they may be right.$100 in installments over 3 years is worth more today than $100 in installments over 5 years........... etc.