Definition
Amortisation
Amortisation is the process of paying off a loan in equal instalments, where each payment covers the interest due and reduces the balance by the remainder.
Early payments are mostly interest and later ones are mostly capital, which is why the balance falls slowly at first and the payoff date moves more than expected when the payment is increased.
Tools that use this term
Loan Calculator
The monthly payment on a loan, the total cost of borrowing and the interest it hides.
Mortgage Calculator
The real monthly cost of a mortgage: repayment, interest, taxes, insurance and total cost over the term.
Debt Payoff Calculator
When a balance reaches zero at your planned payment, and how much interest it costs.