What is mortgage amortization?
Mortgage amortization describes the process of paying off your loan in installments over time. If you’re taking out a fixed-rate mortgage, you’ll know exactly how much you’re going to pay in one lump sum for principal and interest each month for the entire loan term. However, the portion of your payment that goes toward principal versus interest changes over time.
What is an amortization schedule?
An amortization schedule is a table that lists each monthly payment from the time you start repaying the loan until the loan matures, or is paid off. The amortization schedule details how much will go toward each component of your mortgage payment — principal or interest — at various times throughout the loan term.
Can you change your amortization schedule?
If you choose to. If you refinance your mortgage to a new loan, for example, you'll get a new amortization schedule. Likewise if you decide to recast your mortgage, or pay a lump sum to your current loan. You can also change your amortization schedule by making additional payments or prepaying, either with biweekly payments, one additional payment per year or whenever you have extra funds.
