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

Cava also increased its fiscal-year profit guidance, projecting adjusted earnings before interest, taxes, depreciation and amortization of $181 million to $191 million, compared with a prior range of $176 million to $184 million.

From The Wall Street Journal • May 19, 2026

The company announced External link first-quarter adjusted earnings of $2.7 million before interest, taxes, depreciation, and amortization, or Ebitda, from sales of $186.7 million on Thursday.

From Barron's • May 14, 2026

The company expects full-year adjusted earnings before interest, taxes, depreciation, and amortization, or Ebitda, between $400 million and $420 million, with Wall Street forecasting $409.6 million, according to FactSet.

From Barron's • May 14, 2026

The “big four” are expected to generate earnings before interest, taxes, depreciation, and amortization, or Ebitda, of roughly $800 billion.

From Barron's • May 14, 2026

Payments of principal and interest were to be made semiannually in accord with the amortization table of the Federal Farm Loan Board.

From A Stake in the Land by Speek, Peter A. (Peter Alexander)

Related Words

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