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

Overall sales grew 7% in fiscal 2025, driven by 28% growth in its Climate Solutions segment, helping earnings before interest, taxes, depreciation, and amortization grow 25%.

From Barron's • Apr. 16, 2026

The company also expects adjusted earnings before interest, taxes, depreciation and amortization — a measure of underlying profitability — of about $233 million, which would beat the current FactSet consensus of $184.5 million.

From MarketWatch • Apr. 15, 2026

That would increase the combined company’s net debt to earnings before interest, taxes, depreciation and amortization.

From The Wall Street Journal • Apr. 9, 2026

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

From Barron's • Apr. 3, 2026

It was provided that amortization, at �10,000 yearly, should begin in 1917.

From Encyclopaedia Britannica, 11th Edition, Volume 7, Slice 4 "Coquelin" to "Costume" by Various

Related Words

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