Amortization

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A fully amortized mortgage is a mortgage that must be paid off by the end of its term. To amortize means to decrease the principal balance on the mortgage by a monthly payment of both principal and interest. An amortization schedule, which gives the borrower a layout of their payment, is given to every borrower. It is enclosed in every loan package.

Amortization terms can vary but generally accepted terms run in 5 year increments, from 10 to 50 years. You might see this expressed as 30 year fixed rate mortgage where 30 years is the amortization term

Amortization tables are mathematical tables used to calculate the total monthly payment on a mortgage.