How is the mortgage capitalization rate (Rm) expressed?

The mortgage capitalization rate (Rm) is expressed on an annual basis. This is because the rate is used to assess the expected return on investment from a mortgage over a year, aligning it with common investment and financial practices. Annualization allows for easier comparison with other investment returns, making it the industry standard for evaluating the capitalization of real estate property financing.

Using an annual rate also simplifies calculations when projecting income and expenses over the full year, making it a preferred choice in financial analyses and property valuations. This focus on yearly performance allows investors and assessors to gauge the overall profitability and sustainability of mortgage-backed investments properly.