Amortization is the process of paying off a loan through regular payments over a set period, with the payment staying level on a fixed-rate loan. Each payment covers that month's interest first, and whatever is left reduces the principal. Because interest is charged on the balance still owed, early payments on a typical 30-year loan are mostly interest and later ones are mostly principal.
Interest in a monthly payment = remaining balance × annual interest rate ÷ 12
Take a $200,000 loan at a fixed 6% for 30 years. The principal and interest payment, your debt service, is about $1,199 a month. In month one, interest is $200,000 × 6% ÷ 12 = $1,000, so only about $199 goes to principal. After five years you have paid about $71,946 in total, yet the balance has dropped by only about $13,891, to roughly $186,109. The other $58,055 or so was interest.
This matters in two ways. Principal paydown is a real part of your return, but it is equity you cannot spend until you sell or refinance, so do not confuse it with cash flow. Also check whether the loan amortizes at all. Many hard money and bridge loans are interest-only, so the balance never falls, and some loans use a 30-year payment schedule but come due sooner with a balloon payment. Terms vary by lender.