amortize

verb

am·​or·​tize ˈa-mər-ˌtīz 

 also  ə-ˈmȯr-

amortized; amortizing

transitive verb

1

: to pay off (an obligation, such as a mortgage) gradually usually by periodic payments of principal and interest or by payments to a sinking fund

amortize a loan

2

: to gradually reduce or write off the cost or value of (something, such as an asset)

amortize goodwill

amortize machinery

amortizable

ˈa-mər-ˌtī-zə-bəl 

 also  ə-ˈmȯr-

adjective

Did you know?

When you amortize a loan, you "kill it off" gradually by paying it down in installments. This is reflected in the word's etymology. Amortize derives via Middle English and Anglo-French from Vulgar Latin admortire, meaning "to kill." The Latin noun mors ("death") is a root of admortire; it is related to our word murder, and it also gave us a word naming a kind of loan that is usually amortized: mortgage. Amortize carries a different meaning in the field of corporate finance, where it means to depreciate the cost or value of an asset (as, for example, to reduce interest revenue on that asset for tax purposes).

Examples of amortize in a Sentence

Recent Examples on the Web

These expenses are created by amortizing intangible assets connected to companies purchased by Berkshire. —Bill Stone, Forbes, 2 Nov. 2024

YouTube also offers potential advertising revenue, and profits for shows that are already amortized. —Patrick Frater, Variety, 1 Nov. 2024

The board later voted to call for amortizing the unfunded liability over 20 years. —Dana Afana, Detroit Free Press, 1 Nov. 2024

Jonathan Smoke, chief economist for Cox Automotive, said car loans are amortized so that each payment covers interest and principal. —Susan Tompor, USA TODAY, 12 Oct. 2024

Word History

Etymology

Middle English amortisen to kill, alienate in mortmain, from Anglo-French amorteser, alteration of amortir, from Vulgar Latin *admortire to kill, from Latin ad- + mort-, mors death — more at murder

First Known Use

1830, in the meaning defined at sense 1

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Legal Definition

amortize

transitive verb

amor·​tize ˈa-mər-ˌtīz, ə-ˈmȯr- 

amortized; amortizing

: to reduce (an amount) gradually: as

a

: to pay off (as a loan) gradually usually by periodic payments of principal and interest or payments to a sinking fund

b

: to gradually reduce the cost of (as an asset) especially for tax purposes by making periodic charges to income over a time span

amortize the machinery over five years

see also depreciation compare capitalize, deduct

amortizable adjective

amortization

ˌa-mər-tə-ˈzā-shən, ə-ˌmȯr- 

noun