amortization

American  

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

noun

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  

/ əˈmɔːtɪzmənt, 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

• amortizement noun

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

The firm says Critical Metals can achieve almost $200 billion in earnings before interest, taxes, depreciation, and amortization once the first phase of drilling is at 100% capacity.

From Barron's • Apr. 17, 2026

Still, Ord Minnett cuts its FY26 and FY27 EPS forecasts by 6% and 11%, respectively, to account for higher depreciation and amortization along with interest charges associated with its lease liabilities.

From The Wall Street Journal • Apr. 17, 2026

It continues to target sales growth of 1% to 4% in local currencies and an earnings before interest, taxes, depreciation, and amortization margin between 19.5% and 20%.

From The Wall Street Journal • Apr. 14, 2026

Earnings before interest, taxes, depreciation, and amortization, or Ebitda, profit margins could be as high as 50%.

From Barron's • Apr. 3, 2026

Great practical knowledge and experience was shown, in settling the question of how to raise the interests and amortization needed for the vast expenditure, and of how much the trade could bear without crippling it.

From Bremen Cotton Exchange 1872/1922 by Uhte, Ch. F. C.

Related Words

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