The cash flow amount(s) that remains unpaid on each payment date after all payments on the collateralized mortgage obligation tranches (CMO tranches) have been made. It constitutes the residual entitlement to the cash flows in the issue where the mortgage cash flows exceed the principal repayment and interest payments on the CMO bond series/ tranches. In other words, the main source of the CMO residual is the cash flows generated by the collateral (CMO pool) that are larger than the payments due (unpaid and still to be paid) on the CMO tranches.

It is also known as a CMO equity or a z-bond.