8-22 The runoff component of long-term mortgages should be considered in the time buckets in which the maturities actually occur.

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The runoff component of long-term mortgages should be considered in the time buckets in which the maturities actually occur, as this will help to accurately measure and manage interest rate risk. This means that when mortgages are paid off early, the corresponding cash flows should be reflected in the appropriate time buckets, rather than being assumed to occur at the end of the mortgage's original term. By adjusting the cash flow projections in this way, a more accurate picture of the expected cash flows and interest rate sensitivity can be obtained, which can help to inform risk management decisions such as hedging or portfolio rebalancing.

8-22 the Runoff Component of Long-Term Mortgages Should Be Considered