In short, mortgage amortization is the repaying of a loan that has been granted to someone for the purpose of buying a property. The repayment of the mortgage debt is carried out via regular instalments (usually monthly) over the course of a specified time period (usually twenty five years or above).
The Word “Amortization”
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.