Principal Balance

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:

    “We must reserve a back shop all our own, entirely free, in which to establish our real liberty and our principal retreat and solitude.”
    —Michel de Montaigne (1533–1592)

    “Turning, I kissed her,
    Easily for sheer joy tipping the balance of love.”
    —Philip Larkin (1922–1986)