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 after leases increased to 11.52 billion euros from 11.30 billion euros, while the corresponding margin was 38.6%, up from 38%.

From The Wall Street Journal • May 13, 2026

Earnings before interest, taxes, depreciation and amortization excluding one-time items—the company’s preferred profit metric—is forecast at between 5.7 billion and 6.1 billion euros, Merck said.

From The Wall Street Journal • May 13, 2026

The company now expects adjusted earnings before interest, taxes, deprecation, and amortization of $8.2 billion to $8.5 billion in 2026, up significantly from a previous range of $5.2 billion to $5.8 billion.

From Barron's • May 12, 2026

Earnings before interest, taxes, depreciation and amortization increased 13% on a reported basis to 62.63 billion rand, while the corresponding margin grew to 37.4% from 36.5%.

From The Wall Street Journal • May 11, 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 Agg, T. R. (Thomas Radford)

Related Words

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