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

It’s expected to generate $200 billion in 2025 earnings before interest, taxes, depreciation, and amortization, or Ebitda.

From Barron's • Apr. 14, 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 fell 5% on year to 151 million euros.

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

The purpose of these calculations does not lie in the application of amortization to administrative finance.

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