am·​or·​tize | \ ˈa-mər-ˌtīz How to pronounce amortize (audio) also ə-ˈmȯr- \
amortized; amortizing

Definition of amortize

transitive verb

1 : to pay off (an obligation, such as a mortgage) gradually usually by periodic payments of principal and interest or by payments to a sinking fund amortize a loan
2 : to gradually reduce or write off the cost or value of (something, such as an asset) amortize goodwill amortize machinery

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Other Words from amortize

amortizable \ ˈa-​mər-​ˌtī-​zə-​bəl How to pronounce amortizable (audio) also  ə-​ˈmȯr-​ \ adjective

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When you amortize a loan, you "kill it off" gradually by paying it down in installments. This is reflected in the word's etymology. Amortize derives via Middle English and Anglo-French from Vulgar Latin admortire, meaning "to kill." The Latin noun mors ("death") is a root of "admortire"; it is related to our word murder, and it also gave us a word naming a kind of loan that is usually amortized: "mortgage." "Amortize" carries a different meaning in the field of corporate finance, where it means to depreciate the cost or value of an asset (as, for example, to reduce interest revenue on that asset for tax purposes).

Examples of amortize in a Sentence

Recent Examples on the Web But an $11 billion securitized bond at an interest rate of even 3%, amortized over 20 years, would cost more than $700 million a year, by my calculations. Washington Post, "Markets Cheer a PG&E Plan; Ratepayers May Feel Differently," 7 June 2019 Finance executives have complained for years that amortizing corporate pensions can lead to confusing analyses from investors and analysts. Mark Maurer, WSJ, "CFOs Could Change Pension Accounting Style to Avoid Drag on Earnings," 26 Feb. 2020 Pricey early Tesla vehicles allowed that company to more easily amortize the high cost of developing new battery technology. Eric C. Evarts, Fortune, "Does the Hummer EV make sense? Culturally, no. Economically, absolutely," 8 Mar. 2020 The cost of that operating system has to be amortized over that network. Laura Reiley, Washington Post, "Indoor farming is one of the decade’s hottest trends, but regulations make success elusive," 19 Nov. 2019 Peter Fisher, a former Treasury Undersecretary who’s been a supporter of ultra-long bonds, has said they could be made more appealing by having their principal amortized over part or the entire life of the bonds, as mortgage loans do. Washington Post, "Why U.S. Ponders Going Long on ‘Methuselah’ Debt: QuickTake Q&A," 18 Sep. 2019 Few vehicles have been such cash cows for their makers, either; consider how long ago the R&D for that platform must have been amortized. Jonathan M. Gitlin, Ars Technica, "The 2020 Cadillac XT6: Better than an Escalade in every way," 29 July 2019 That’s enough to trouble the companies developing robotaxis, the fully autonomous vehicles that hope to amortize their costs by ferrying passengers. Alex Davies, WIRED, "This Lidar Is So Cheap It Could Make Self-Driving a Reality," 11 July 2019 Costs may be fixed, such as amortizing a factory, equipment or other overhead that does not vary with the amount of output produced. Edward Lotterman, Twin Cities, "Real World Economics: Oil prices, war, and a bad corn crop," 23 June 2019

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'amortize.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of amortize

1830, in the meaning defined at sense 1

History and Etymology for amortize

Middle English amortisen to kill, alienate in mortmain, from Anglo-French amorteser, alteration of amortir, from Vulgar Latin *admortire to kill, from Latin ad- + mort-, mors death — more at murder

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Time Traveler for amortize

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The first known use of amortize was in 1830

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Last Updated

1 May 2020

Cite this Entry

“Amortize.” Dictionary, Merriam-Webster, Accessed 4 Jun. 2020.

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More Definitions for amortize


How to pronounce amortize (audio)

English Language Learners Definition of amortize

business : to pay money that is owed for something (such as a mortgage) by making regular payments over a long period of time
amor·​tize | \ ˈa-mər-ˌtīz, ə-ˈmȯr- How to pronounce amortize (audio) \
amortized; amortizing

Legal Definition of amortize

: to reduce (an amount) gradually: as
a : to pay off (as a loan) gradually usually by periodic payments of principal and interest or payments to a sinking fund
b : to gradually reduce the cost of (as an asset) especially for tax purposes by making periodic charges to income over a time span amortize the machinery over five years — see also depreciation — compare capitalize, deduct

Other Words from amortize

amortizable adjective
amortization \ ˌa-​mər-​tə-​ˈzā-​shən, ə-​ˌmȯr-​ How to pronounce amortization (audio) \ noun

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More from Merriam-Webster on amortize

Spanish Central: Translation of amortize

Nglish: Translation of amortize for Spanish Speakers

Britannica English: Translation of amortize for Arabic Speakers

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