PROPGUIDE − A Complete Property Guide
#happyhome

Amortization

Loading video...

Description

Amortization is the process of repaying debt in regular intervals over a period of time. Watch this video to know more about the term 'amortization.'

Transcript

Amortization is the process of repaying debt in regular intervals over a period of time. When home buyers pay off the principal amount and the interest in monthly instalments over many years, the process is known as “amortization”. The word “amortization” is also used to denote the process of spreading out capital expenses on intangible assets over a period of time for accounting purposes and to cut down on tax expenses. The word “depreciation”, however, is used in the context of tangible assets. The word “amortize” means “to bring to death”. A mortgage loan is considered an amortizing loan if the loan principal decreases over the tenure period of the loan. In amortizing home loans, every month, a part of the equated monthly instalment reduces the loan principal. The rest goes toward interest payment. When you pay off an amortizing loan, the monthly instalments are determined by an amortizing schedule. The ratio of interest payment and the principal amount too is determined by the amortizing schedule. If the monthly payments will fully pay off the loan at term, it is considered a fully amortizing payment. A fully amortizing payment is calculated at beginning and the monthly instalments do not change during the tenure period of the loan. In negative amortization, the monthly payments are less than the interest payment that is due. Under negative amortization, the outstanding balance of the loan rises. In India, nearly 95% of the home loans are floating interest rate loans and not fixed interest loans. So, when the interest rates fall, often the banks reduce the tenure period, and not the equated monthly instalments. So, the amortization schedule is adjusted accordingly.

Tags: Video, propguide


Is NCR Losing Out To Mumbai, Bengaluru, Pune?

The National Capital Region, for very long, has been the largest residential real estate market in India. But, is NCR losing out to Mumbai, Bengaluru and Pune?

November 10 2015

+ Click Here To Read This Article

5 Creative Eco Resorts Around The World

If luxury housing are eco-friendly then what else could you want? It's like having your cake and eating it too!

May 04 2015

+ Click Here To Read This Article

10 Skywalks In the World That Allow A Stroll In The Clouds

Some wonders are natural. There are however many wonders that are man-made. The best of them are skywalks that give you thrill of danger without having to face it.

June 09 2015

+ Click Here To Read This Article

Proposed Dwarka-Manesar E-Way To Bring Realty Boom In NCR

In the hope of discovering a new and possibly the last of such realty hubs in the National Capital Region, many expats and other investors have rushed in to put in their money.

June 05 2015

+ Click Here To Read This Article

Why Real Estate Is So Expensive In Mumbai

In India’s most prosperous city, half the population live in slums. In Savills' top 12 most expensive cities in the world, Mumbai was the cheapest city to live in. Yet, why is real estate in Mumbai the most expensive real estate is the world?

May 18 2015

+ Click Here To Read This Article

Earth Matters: Sustainable Living Begins At Home With These Steps

Environmentally conscious people would want to live as comfortably as possible without compromising the ecological balance of the planet. But, how should we strike the right balance?

May 12 2015

+ Click Here To Read This Article

Buying a Home? 5 Things That Make Your New Apartment Livable

Each person might have his or her own definition of what makes a place livable. Here are a few things to find out if all your needs are fulfilled and if the new place is safe.

May 11 2015

+ Click Here To Read This Article

#WeeklyNewsRoundup: I-T Dept Identifies 400 Benami Transactions

Here are the week’s top stories from the real estate sector.

May 27 2017

+ Click Here To Read This Article

Here are the week’s top stories from the real estate sector.

Here are today's top stories from the real estate sector.

PropGuide lists localities in Ahmedabad that offer unlimited choices if you are looking to buy a...

The benefits of property ownership are not just monetary. There are so many other ways in which...

The Goods And Services Taxes has clearned a proposal to charge a cess of 15 per cent on luxury cars...

The Union Cabinet has approved the Noida-Greater Noida Metro Rail project, covering a length of...

Here are some of the features that modern-day homebuyers look for in a luxury home.

PropGuide lists top four pockets of Pune that are a hit among high-net-worth individuals, planning...

A building code is a set of norms that govern construction of buildings by stipulating minimum...

PropGuide simplifies complex real estate jargons for you.

Prime lending rate is the interest rate at which banks lend to its most credit worthy...

Proptiger has released it's quarterly review report on India's real estate sector. Ankur Dhawan,...

Subscribe Now

To stay tuned with real estate updates

Pick:

x +

Drop Your Query Here


Top