When someone takes out a mortgage from a bank or another lending institution the lender will sit down with the borrower and they will layout for them the amount of periodic payments they feel is correct for the life of the loan. So for example, with a 5 year fixed rate mortgage the minimum payment might be bi-weekly and a little larger than what one might find with a 10 year mortgage. Each of these periodic payments (bi-weekly, monthly, etc.) must fully cover the interest and also partly pay-off a proportion of the principal for the mortgage in order for that mortgage to be in the amortization process and to eventually amortize completely. This is your ultimate goal as a mortgage borrower to eventually pay off this loan, or for the sake of this article, amortize your mortgage and end the term of the loan; making you a much happier and much less in debt person.
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