amortization
UK[əˌmɔːtaɪˈzeɪʃən]US[əˌmɔːrtəˈzeɪʃən]
n
The process of gradually paying off a debt, such as a loan or mortgage, through regular payments over a set period.
n
The process of gradually writing off the initial cost of an intangible asset over its useful life for accounting purposes.
Morpheme Breakdown
a
mort
ization
a
to
mort
death.
ization
Etymology
The term "amortization" originates from the Latin verb 'admortire,' meaning "to kill," which itself derives from 'ad-' (to) and 'mors' (death). In Medieval Latin, the term evolved into 'amortisare' in legal and financial contexts, referring to the act of "alienating lands in mortmain," a permanent transfer to an institution like the Church, metaphorically "killing" the property's ability to be sold or inherited. This concept of rendering something "dead" or extinguished was later applied to finance, where it describes the process of "killing off" a debt through incremental payments. The modern accounting sense of spreading an intangible asset's cost over time is a further abstraction of this core idea of gradual extinction.
Analysis
Structure: a + mort + ization
a- (Latin ad-): A prefix meaning "to" or "toward," often indicating direction or completion.
mort (Latin mors, mort-): A root meaning "death."
ization (Latin -izare + -ation): A noun-forming suffix meaning "the process or result of making or becoming."
Examples
The loan agreement includes a 30-year amortization schedule.
Amortization of the patent's cost will occur over its 20-year legal life.
Early in the mortgage term, most of your payment goes toward interest, not principal amortization.