Amortization Schedule

Updated: 17 January 2025

What Does Amortization Schedule Mean?

An amortization schedule outlines the details of how a loan will be repaid. It typically specifies the amounts allocated to interest and principal for each payment over specific time periods. In the context of insurance, many individuals purchase mortgage insurance to mitigate the risk of defaulting on an amortized mortgage loan.

Insuranceopedia Explains Amortization Schedule

Amortization schedules are crucial for individuals with amortized loans because the payment amounts can vary significantly from one period to the next. It is essential for borrowers to fully understand these changes in payment values while repaying their loans, as this awareness can help prevent defaults or other repayment errors. However, if defaults do occur, mortgage insurance can protect the lender from losing the entire loan amount.

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