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Definition of Amortized Loan
- An amortized loan is a loan where the interest and principal are both paid off in their entirety through a series of scheduled payments over a specified amount of time.
Related Terms and Acronyms
- Principal — Bank,
- The original balance of money lent on an outstanding loan and fees, excluding interest. Also the remaining balance of a loan, excluding interest.
- Origination Date — Bank,
- The date on which a loan is funded.
- Amortization — Bank,
- Amortization refers to the process of gradually paying down the principal of a loan. Each payment toward the principal reduces your loan by that amount. This is different than an interest-only loan payment where the principal balance is never reduced. Amortization for a mortgage loan in Canada is normally 25 years, but can be as few as 5 years.
- Loan — Bank,
- Letting another party use something of value temporarily.
- Remaining Term — Bank,
- The time it will take to pay off the rest of an instalment loan as scheduled.
- Mortgage (mtg) — Abbreviation, Important,
- A mortgage is a contract stipulating a specific real property, typically a residence or building, as collateral for a loan. The mortgage incurs a rate of interest that varies according to term and other features.
- Interest (int, IN) — Bank,
➥ Bank account transaction code.
- Money paid for the use of borrowed funds, usually expressed as an annual percentage.
- Origination Fee — Bank,
- The fee a lender charges to process a loan. It usually includes the cost to prepare loan documents, check a borrower's credit history, inspect the property and sometimes conduct an appraisal. CanEquity will in most cases use a lender who doesn't charge this fee or we will cover the cost in full.
- Reconveyance — Definition,
- The transfer of title to the borrower after a mortgage has been paid fully.
- Original Principal Balance — Bank,
- The amount borrowed.
- Interest Rate (IR) — Bank, Very Important,
- The rate a lender charges an individual to borrow money.
- Mortgage Calculator — Definition, Very Important,
➥ CanEquity's mortgage calculator has been rated number one by the Globe and Mail.
- A program that calculates the costs involved in a mortgage or determines what kind of mortgage a person can qualify for.
- Amortization Schedule — Bank,
- A detailed table showing the amortization of a loan which includes the beginning principal amount, period payments, the interest portion of each payment, the principal reduction portion each payment, and the ending balance. The Canadian Equity Group has developed a mortgage rate calculator which will generate a perfect example of an amortization schedule.