I'm trying to understand the entire Mortgage Backed Securities market. I understand the concept, but I'm a little confused by the actual number values, mainly because I don't know what the pricing is. For example, let's say I'm a bank. I give out 10 mortgages for $1million each, for a total of $10 million. Now, let's say I create an MBS from these 10 mortgages. They are all prime borrowers, and the rates are all 5% for 30 years. How much would the total value of these MBSs go for? Would they sell for much higher than $10 million? I know that the bank is out-of-pocket for $10 million, so I'm assuming that once these mortgages are packaged and sold as MBSs, the total price would exceed $10 million so that the bank would get back the cash it invested. My guess is that there is some way to value these that would take the future value of these mortgages, and then come up with a price that values them based on payment risk, interest rate risk, etc. Does anyone have a rough value how much these MBS would be priced at? In addition, how much do Investment bankers charge to create this MBS?