Mortgage Amortization

Mortgage amortization is essentially a loan repayment plan or schedule. It facilitates the removal of the debt burden of the borrower over a certain fixed period of time by making monthly/periodic payments. The payments made through regular, periodic installments comprise of the monthly interest (including accrued interest on the outstanding debt) and a chunk of the principal balance i.e. a portion reducing the outstanding amount of the actual debt. The amount of monthly (periodic) payments remains the same over the life of the loan.