Which mortgage type involves less frequent payments that cover both principal and interest gradually?

An amortized loan is designed to be paid off gradually over time through regular payments that include both principal and interest. Each payment reduces the overall principal balance, meaning that over the life of the loan, the borrower will progressively pay down the debt. This structure allows borrowers to have a clear schedule of when the loan will be fully paid off, which is helpful for financial planning.

In contrast, the other types of mortgages mentioned employ different structures. An adjustable-rate mortgage involves initial fixed-rate payments that can change after a specified period, often leading to variability in payment amounts. A balloon loan includes a series of smaller payments followed by a larger final payment, which does not allow for gradual repayment of the entire principal balance. An interest-only loan enables borrowers to pay only interest for a set period, with no reduction in principal until a later stage, leading to a larger lump sum payment due at the end.

Thus, the definition and characteristics of an amortized loan make it the correct choice for the question regarding a mortgage type that facilitates less frequent and gradual payment of both principal and interest.