Amortization is the gradual repayment of debt over a period of time, such as payments on a mortgage. This isn't to be confused with the term of the loan. If the term and amortization are the same, than your loan will be paid in full at the end of your loan. If the term of the loan is less than the amortization than you will have a balloon payment at the end of your loan. Is not uncommon for banks to set your payments up based on a 25 or 30 year amortization, but set the maturity of your loan for 15 years. In this scenario the last 10 or 15 years of payments will be due in the 15th year. At that point, most people refinance the balloon balance. The advantage to doing it this way is that you get a smaller payment, and it is certainly okay to do so. Just be aware of how your loan is structured to ensure you don't have any surprises.