Mortgage amortization is the systematic repayment of a loan through monthly installments, with each payment divided into principal and interest. Initially, more of the payment goes toward interest, but over time, the principal portion increases, reducing the loan balance faster. Understanding amortization is essential for borrowers, as it impacts the total loan cost, equity building, and aids in budgeting and financial planning. Most accounting software can easily calculate amortization, helping borrowers visualize their repayment path.