Amortization is the process of paying down a loan balance through regular installments that include both principal and interest. In a standard amortizing mortgage, early payments are heavily weighted toward interest, with the principal portion increasing over time. A 30-year amortization schedule is standard for conventional investment loans, though commercial and bridge loans may use shorter amortization periods or interest-only structures. Understanding amortization helps investors calculate principal paydown as a component of total return and evaluate how different loan structures affect monthly cash flow and long-term wealth building.