Amortization

Amortization, refered to as "am." by mortgage professionals, refers to the process of paying off a mortgage in regular payments composed of both interest and principal.

The Amortization Period is the time over which the mortgage is to be completely repaid, assuming equal payments.

This means that when looking, for example, at a mortgage with a 25-year amortization period, it would take 25 years to reduce the balance to zero, if all regular payments were made on time and the terms (payment, interest rate) remained the same.

An Amortization Schedule is a table showing the amounts of principal and interest which make up each of the periodic level payments and the outstanding principal balance of the loan after each level payment is made.

(Source:  CAAMP)

Amortization, refered to as "am." by mortgage professionals, refers to the process of paying off a mortgage in regular payments composed of both interest and principal.

The Amortization Period is the time over which the mortgage is to be completely repaid, assuming equal payments.

This means that when looking, for example, at a mortgage with a 25-year amortization period, it would take 25 years to reduce the balance to zero, if all regular payments were made on time and the terms (payment, interest rate) remained the same.

An Amortization Schedule is a table showing the amounts of principal and interest which make up each of the periodic level payments and the outstanding principal balance of the loan after each level payment is made.

(Source:  CAAMP)