what is a yield on a mortgage

un-yield-ing

A fee paid by a mortgage holder as a prepayment premium in order to attain the same yield they would have if they had paid all payments to maturity.

Spread compression happens as a result of the price of a bond going up and, as per the inverse relationship between price and yield, the yield goes down. There is risk of spread compression when demand for a bond increases because the increased demand can push up the price of a bond.

what is cut off yield?

ans. cut off yield is the rate at which bids are accepted. bids at yield higher than the cut off yield are rejected and those lower than the cut off are accepted. the cut off yield is set as the coupon rate for the security. bidders who have bid at lower than the cut off yield pay a premium on the security, since the auction is a multiple price auction.