amortize: meaning, definition, pronunciation and examples
C1Formal, Technical, Business
Quick answer
What does “amortize” mean?
To gradually pay off a debt through regular payments over time.
Audio
Pronunciation
Definition
Meaning and Definition
To gradually pay off a debt through regular payments over time.
To gradually write off the initial cost of an intangible asset over its useful life; to reduce or extinguish a debt, cost, or expense by periodic charges to income or profit.
Dialectal Variation
British vs American Usage
Differences
Spelling: British English also accepts 'amortise'. The pronunciation differs slightly (see IPA).
Connotations
Identical technical/financial connotations in both varieties.
Frequency
Equally common in formal business/finance contexts in both regions. Rare in everyday conversation.
Grammar
How to Use “amortize” in a Sentence
amortize somethingamortize something over somethingamortize something against somethingVocabulary
Collocations
Examples
Examples of “amortize” in a Sentence
verb
British English
- The business plan proposes to amortise the loan over a decade.
- Goodwill must be amortised under the old accounting rules.
American English
- We need to amortize the startup costs over three years.
- The bank allows you to amortize your mortgage with bi-weekly payments.
adverb
British English
- The cost was accounted for amortisably over the asset's life. (Extremely rare)
American English
- The cost was accounted for amortizably over the asset's life. (Extremely rare)
adjective
British English
- The amortisable amount is calculated annually.
- They reviewed the amortisation schedule.
American English
- The amortizable amount is calculated annually.
- They reviewed the amortization schedule.
Usage
Meaning in Context
Business
The company will amortize the development costs over five years.
Academic
The study examined different models to amortize public infrastructure debt.
Everyday
We got a loan and will amortize it with monthly payments for 25 years. (Rare in casual speech)
Technical
The software's algorithm helps amortize intangible assets according to IFRS standards.
Vocabulary
Synonyms of “amortize”
Vocabulary
Antonyms of “amortize”
Watch out
Common Mistakes When Using “amortize”
- Using 'amortize' for tangible asset depreciation (use 'depreciate').
- Confusing with 'moralize'.
- Incorrect stress: /ˈæmɔːrtaɪz/ is less common.
FAQ
Frequently Asked Questions
Both mean to reduce the book value of an asset over time. 'Depreciate' is used for tangible assets (machinery, vehicles). 'Amortize' is used for intangible assets (patents, goodwill) and loans.
It's rare. It's a technical financial term. In everyday talk about loans, people say 'pay off' or 'pay down'.
Yes, 'amortise' is the standard British English spelling, while 'amortize' is standard in American English.
It's a table detailing each periodic payment on a loan, showing the amount going toward principal and the amount going toward interest.
To gradually pay off a debt through regular payments over time.
Amortize is usually formal, technical, business in register.
Amortize: in British English it is pronounced /əˈmɔːtaɪz/, and in American English it is pronounced /ˈæmərtaɪz/ or /əˈmɔːrtaɪz/. Tap the audio buttons above to hear it.
Phrases
Idioms & Phrases
- “None specific; technical term.”
Learning
Memory Aids
Mnemonic
Think: 'A MORTgage' is a loan you 'amortIZE' (make die) over time by paying it off.
Conceptual Metaphor
DEBT IS A BURDEN (to be reduced/eliminated over time); COST IS A SUBSTANCE (to be spread thinly over an area/time).
Practice
Quiz
In which context is 'amortize' MOST appropriately used?