Explore commonly used personal finance terms.
An amortizing security is a type of debt investment that pays both interest and principal over the life of the security, gradually reducing the principal balance until it is fully repaid at maturity. Examples include mortgage-backed securities (MBS) and certain types of bonds. For investors, amortizing securities offer predictable cash flows and reduced credit risk over time. These securities are often favored in fixed-income portfolios due to their consistent income stream and lower sensitivity to interest rate changes.
