Difference between revisions of "Amortisation"
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| − | Amortisation is the running down or payment of a loan by | + | Amortisation is the running down or payment of a [[loan]] by installments. An example is a repayment [[mortgage]] on a house, which is amortized by making monthly payments that over a pre-agreed period of time cover the value of the loan plus interest. With loans that are not amortized, the borrower pays only interest during the period of the loan and then repays the sum borrowed in full. |
[[Category:Banking]] | [[Category:Banking]] | ||
Revision as of 12:36, August 11, 2007
Amortisation is the running down or payment of a loan by installments. An example is a repayment mortgage on a house, which is amortized by making monthly payments that over a pre-agreed period of time cover the value of the loan plus interest. With loans that are not amortized, the borrower pays only interest during the period of the loan and then repays the sum borrowed in full.