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What is Amortization and How Does It Work?
What is Amortization and How Does It Work?
Tessa Arimado avatar
Written by Tessa Arimado
Updated over a week ago

Amortization is the sum total of the principal amount and the interest amount divided over the tenure of the loan.

Each month for a set number of years, you will be paying the loan principal and interest at different amounts, but the total payment is still equal every period.
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When it comes to housing loans, monthly payments remain the same, but there are parts of the loan that change as time passes.

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