Definition: An amortized mortgage is repaid through scheduled payments that reduce the principal balance over time as well as paying interest. A fully amortizing loan reaches a zero balance at the end of its scheduled term if payments are made as agreed.
Example
A scheduled $1,500 principal-and-interest payment includes $1,000 of interest and $500 of principal. The loan balance falls by $500.
Keep the distinction clear
Amortization describes repayment of principal; it does not by itself mean the interest rate is fixed. A partially amortized loan leaves a balance due at maturity.
Related terms
Principal · Interest · Balloon Payment · Negative Amortization
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Mortgage Payment Factors: Calculate Principal and Interest
References: CFPB: Mortgage payment calculations
Pronunciation (US): AM-er-tyzd MOR-gij (capitals show stress)
Pronunciation reference: Merriam-Webster
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