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:
“Light, God’s eldest daughter, is a principal beauty in a building.”
—Thomas Fuller (1608–1661)
“Not in vain is Ireland pouring itself all over the earth. Divine Providence has a mission for her children to fulfill; though a mission unrecognized by political economists. There is ever a moral balance preserved in the universe, like the vibrations of the pendulum. The Irish, with their glowing hearts and reverent credulity, are needed in this cold age of intellect and skepticism.”
—Lydia M. Child (1802–1880)