Amortization Schedules

by : Richard Romando

The term "amortization" has different meanings within different contexts. For example, it refers to the allocation of a lump sum amount to different time periods in business, and the calculation of a program's use of system resources in computer science. An amortization schedule, in general, is a record of loan or mortgage payments. This record includes the payment number, date, amount, breakdown of principal and interest and the remaining balance owing after the payment.

Amortizing Loan

An amortizing loan is a loan whose periodic repayments contain an amount designated for the reduction of the principal, so that the balance will eventually be reduced to zero. The time necessary for the balance to reach zero is calculated in an amortization schedule.

Standard and Simple Interest Mortgage Amortization

In a standard mortgage, tax and insurance payments are also shown in the amortization schedules, if made by the lender and the balance of the tax or insurance escrow account. On a simple interest mortgage, the interest is based on the balance of the day of payment calculated daily. If payment were made on the first day of every month in both cases, it would come out the same over the course of a year.

Amortization Schedule Calculators

Most amortization schedule calculators let you see how amortized loans like mortgages work, in a table. When data such as mortgage amount, interest rate and term, or length of loan are entered into the calculator, numbers are immediately crunched and results displayed within seconds. There are a number of useful amortization schedule calculators offered by websites such as,, HSH Associates etc, and applications like LoanAmortizer, AmortizeIT, and SolveIT.