PROPGUIDE − A Complete Property Guide


Loading video...


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.'


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

#RealtyNewsRoundup: Centre To Build 3 Cr Houses For Rural Poor By 2022, Says Tomar [Video]

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

January 23 2017

+ Click Here To Read This Article

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

Provident Housing Rays of Dawn is located at Kumbalgodu in Bengaluru. The total area of the project...

Availing of a home loan is a long-term commitment. In most cases, it is also the biggest investment...

Urban Development M Venkaiah has made it clear that his government will strictly implement the...

The Akrama-Sakrama Scheme came into force in March 23, 2015. The owners now have an extended...

Reports show authorities in Noida are mulling an exit policy for developers to surrender vacant...

Here is all you need to know about 'betterment fees'.

Indians are looking forward to favourable movements in the tax slabs. This could usher in a happier...

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

PropGuide simplifies complex real estate jargons for you.

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

Sunil Mishra, Chief Business Officer, PropTiger, talks on new online realty platforms for NRIs.

Subscribe Now

To stay tuned with real estate updates


x +

Drop Your Query here