This chapter addresses the specification and estimation of prepayment models. It starts by examining historical prepayments and shows various plots to inspire how a concrete model for prepayments can be specified. Two possible prepayment models are proposed, each having the gain from refinancing, the pool factor, and the term to maturity as explanatory variables. In addition, the preferred specification also has the 10-year swap rate as an explanatory variable but only if the gain is above a given threshold. The models are estimated via both maximum likelihood and nonlinear least squares. Finally, estimated prepayments as a function of the explanatory variables are analysed.