What is amortisation?
Paying a loan down with instalments that cover interest first and principal with the rest, on a fixed schedule.
Amortisation is the process of repaying a loan through regular, fixed instalments, where each payment first covers the interest due for that period and whatever is left over reduces the balance. The schedule is built so the loan reaches exactly zero on its final payment — no balloon amount left over, no shortfall.
In practice
Every standard Irish mortgage amortises. Interest is charged on whatever balance is still outstanding, so early in the loan, when the balance is largest, most of each payment goes on interest and only a small remainder reduces principal. As the balance falls, the interest portion shrinks and more of each fixed payment goes towards principal instead. This split moves every single month, even though the payment itself stays the same for the length of a fixed or variable rate period. Understanding how repayments work this way explains why a mortgage can feel like it’s barely denting the balance in year one, then falling much faster in year twenty.
Where you’ll see it
The clearest view of amortisation is an amortisation schedule: a year-by-year (or month-by-month) table showing how much of each payment went on interest, how much reduced principal, and what balance remains. A mortgage calculator generates this schedule automatically once you enter the loan amount, rate and term, letting you see exactly how the balance is expected to shrink over the life of the loan.