amortization

American  

[am-er-tuh-zey-shuhn, uh-mawr-] / ˌæm ər təˈzeɪ ʃən, əˌmɔr- /

noun

• amortizations
  plural

1. an act or instance of amortizing a debt or other obligation.

2. the sums devoted to this purpose.

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amortization British  

/ əˌmɔːtaɪˈzeɪʃən /

noun

1. 1. the process of amortizing a debt

   2. the money devoted to amortizing a debt

2. (in computing the redemption yield on a bond purchased at a premium) the amount that is subtracted from the annual yield Compare accumulation

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amortization Cultural  

1. A term that refers either to the gradual paying off of a debt in regular installments over a period of time or to the depreciation of the “book value” (that is, the standard assessed value) of an asset over a period of time.

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Other Word Forms

Derived Forms

• amortizement
  noun

Inflected Forms

Nouns

• amortizations
  plural

Etymology

Origin of amortization

First recorded in 1665–75, amortization is from the Medieval Latin word a(d)mortizātiōn- (stem of admortizātiō ). See amortize, -ation

Explanation

Amortization means a debt is being paid off by a series of payments. An amortization schedule for your car loan will show exactly how much you owe and how long it’ll take to pay it. Amortization is fancy way to describe a payment plan: you gradually pay off a specific amount by making small payments according to a set schedule. Amortization takes place over a specific period of time. The root of amortization can be traced to the Middle English word amortisen, meaning “to kill.” In this case, it’s a debt that’s being killed off — slowly, over time. The word is often applied to car or home loans.

Example Sentences

See Examples For:

amortization amortizations

Grab expects its financial-services segment to generate $500 million in adjusted earnings before interest, taxes, depreciation and amortization by 2028, with a combined loan portfolio of more than $6 billion.

From The Wall Street Journal ● Sep. 15, 2026

Ignoring amortization is akin to pretending the ice cube hasn’t gotten smaller.

From The Wall Street Journal ● Sep. 11, 2026

If ever a company illustrated the pitfalls of ignoring amortization, Bending Spoons is it.

From The Wall Street Journal ● Sep. 11, 2026

Qantas expects depreciation and amortization costs to rise to A$2.40 billion in its current fiscal year.

From The Wall Street Journal ● Aug. 27, 2026

Likewise, the funds required for the amortization of bond issues are often obtained from general taxation although vehicle license fees are sometimes used for that purpose.

From American Rural Highways by T. R. (Thomas Radford) Agg

That has led to a rare situation in Canada where banks are seeing mortgage amortizations getting extended beyond 30 years, sparking calls from regulators to take immediate action to mitigate risks.

From Reuters ● Sep. 1, 2023

Ecuador also managed to reduce certain applicable interest rates and suspend all amortizations with China Eximbank for a six-month grace period, the government said.

From Reuters ● Sep. 20, 2022

The government has already taken measures to restrain the housing market, including reducing amortizations and requiring stricter criteria for mortgage qualifications.

From BusinessWeek ● Feb. 13, 2012

Bank of Montreal’s mortgage offer is limited to 25-year amortizations to ensure consumers pay off their loans faster, the lender said.

From BusinessWeek ● Jan. 17, 2012

Distressed companies would get technical advice, loans, Government contracts and fast tax amortizations to help them diversify their products and find new markets.

From Time Magazine Archive

Related Words

• amount
• award
• cash
• deposit
• disbursement
• fee
• outlay
• pension
• premium
• refund
• reimbursement
• remittance
• reparation
• repayment
• restitution
• return
• reward
• royalty
• salary
• settlement