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Mortgage Amortization

Mortgage amortization is the act of paying a loan that has been given to someone for the specific purpose of buying a property. The payment of the mortgage loan is carried out through regular installment payments (most often monthly) over the course of a pre-determined time period (usually 25 years).

The word amortization itself is an interesting term. Amortization is the act of decreasing a an amount over a given time period. The “mort” part of amortization has its root in the latin and generally relates to death. In fact many words relating to death contain this latinate word: rigor mortis, mortuary, mortician, mortify… even mortgage. Consequently, we could suppose that amortization suggests a long time… such as until death!

Hopefully we would all amortize mortgages prior to passing away, however we can understand from this that mortgage amortization generally occurs over a long time period.

A Summary Explanation of the Term “Mortgage Amortization”

To summarize, mortgage amortization is the act of decreasing an amount borrowed for property or real estate acquisition whereby the settlement of the of such an amount occurs regularly over time. Amortization is the paying off of a financial debt over time.