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The reduction of principal or debt by regular payments. A repayment mortgage on a house is amortized by making regular payments that cover the loan and the interest. A non-amortized mortgage is one where the borrower pays only the interest during the life of the loan and repays the principal at the end. Amortization can also be achieved via a purchase or sinking fund.
See also: Accretive, Depletion, Depreciation