Mortgage Amortization

Definition of "Mortgage amortization"

Ken Berard
Ken Berard Weichert, Realtors - Randolph

Amortization is paying a loan on an installment basis. The term is usually associated with a mortgage payment schedule. As a loan is amortized, the equity in the associated property is increased. However, in the early years of a mortgage, the majority of the payments are for interest rather than principal. For example, the payment on a 30 year conventional $95,000 mortgage at 9.5% would be $798.81.

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