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

Adjusted earnings before interest, taxes, depreciation and amortization climbed 2% to 3.3 billion euros.

From The Wall Street Journal • May 13, 2026

The German energy company said Wednesday that adjusted earnings before interest, taxes, depreciation and amortization, and adjusted earnings per share both rose 25% in the first three months of the year.

From The Wall Street Journal • May 13, 2026

However, that guidance excludes about $1.02 a share for stock-based compensation, net tangible amortization, and acquisition related costs.

From Barron's • May 13, 2026

Adjusted earnings before interest, taxes and amortization fell 84% to CNY 5.10 billion.

From Barron's • May 12, 2026

It is no case for calculating amortization and other refinements.

From Principles of Mining Valuation, Organization and Administration by Hoover, Herbert

Related Words

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