Principal balance, in regard to a mortgage or other debt instrument, is the amount due and owing to satisfy the payoff of the underlying obligation.
Amortized mortgage loans automatically pay a portion of each monthly payment to the principal balance with the rest being paid as interest.
An interest-only loan does not require any monies be paid toward the principal balance each month, but is allowable.
Famous quotes containing the words principal and/or balance:
“I note what you say of the late disturbances in your College. These dissensions are a great affliction on the American schools, and a principal impediment to education in this country.”
—Thomas Jefferson (1743–1826)
“As deaths have accumulated I have begun to think of life and death as a set of balance scales. When one is young, the scale is heavily tipped toward the living. With the first death, the first consciousness of death, the counter scale begins to fall. Death by death, the scales shift weight until what was unthinkable becomes merely a matter of gravity and the fall into death becomes an easy step.”
—Alison Hawthorne Deming (b. 1946)