Amortization
The schedule by which your loan balance is gradually paid down through fixed payments over time.
In plain English
Amortization spreads your loan repayment across equal payments over the loan term, with the mix of principal and interest shifting each month — early payments are mostly interest, later payments are mostly principal.
Seeing your amortization schedule shows you exactly how much equity you'll have built at any point in the future, and how extra payments toward principal can shorten your loan.
Where you'll run into it
Guides and tools on TheBuyingPath that cover amortization in context.
Related terms
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