Amortization
The repayment of principal from scheduled mortgage payments that exceed the
interest due. The scheduled payment less the interest equals amortization.
The loan balance declines by the amount of the scheduled payment, plus the
amount of any extra payment. For a detailed explanation, see Mortgage Amortization:
How Does It Work? If the payment is less than the interest due, the balance
rises, which is negative amortization.
Amortization schedule
A table showing the mortgage payment, broken down by interest and amortization,
the loan balance, tax and insurance payments if made by the lender, and the
balance of the tax/insurance escrow account.