What is “Amortization”?
Amortization is the process of paying off debt by making regular principal and interest payments over a specified period of time at the end of which the mortgage balance is paid off in full.
🔹The amortization period affects how long it will take to repay the loan and how much interest will be paid over a life of a mortgage;
🔹Shorter amortization periods involve larger monthly payments and lower total interest costs;
🔹Longer amortization periods involve smaller monthly payments and higher total interest costs;
🔹Amortization over 25 years requires a minimum down payment of at least 20%.
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