According to Philip Russel, assistant professor of finance at Philadelphia University, an amortization mortgage is the systemic payment plan - such as a monthly payment - so that your loan is paid off over the specified loan period. Based on his given definition, we can therefore safely conclude that an amortization mortgage is an amount of money that is to be paid off by a certain date. Paying off an amortization mortgage is usually done in equal monthly installments. One example of an amortization mortgage is one that involves your car loan or your home loan. Your credit account however cannot be considered an amortization mortgage since it does not involve a fixed date for payoff.

When a mortgage loan is amortized, the amortization schedule is what will calculate the amount of your monthly mortgage payment. A normal, or standard, mortgage amortization will allow for the monthly mortgage payment to cover all interest accrued on the loan in the last thirty days since your last payment as well as a portion to be applied to the original principal balance of the home mortgage loan. By following the mortgage amortization schedule, the borrower is paying off the balance of the mortgage loan principal, a little bit each month, and building equity into his home.

It is not necessary for the mortgage consumer to know the mathematical formulas that are used in mortgage amortization in order to be able to answer common mortgage questions. What is important is that you have a general understanding of mortgage amortization; that you understand the ways that you can control or alter your mortgage amortization - allowing you to pay less for your home, and that you know what questions can be answered using a mortgage amortization schedule or a mortgage calculator.

The first thing to consider is what length of time your mortgage amortization or payment life is. The longer the amortization period the more interest that will be paid on the mortgage. For most first time home buyers, purchasing a home through a mortgage will be the largest single investment you ever make. To make it more affordable, the length of the mortgage, called the mortgage amortization period, can be stretched out from a few years, to ten years or even to thirty years. This means a lower monthly mortgage payment, but a longer term to pay it back. It is wise to have the shortest amortization period possible to avoid the additional interest charges.