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:
“For me, the principal fact of life is the free mind. For good and evil, man is a free creative spirit. This produces the very queer world we live in, a world in continuous creation and therefore continuous change and insecurity. A perpetually new and lively world, but a dangerous one, full of tragedy and injustice. A world in everlasting conflict between the new idea and the old allegiances, new arts and new inventions against the old establishment.”
—Joyce Cary (1888–1957)
“In a famous Middletown study of Muncie, Indiana, in 1924, mothers were asked to rank the qualities they most desire in their children. At the top of the list were conformity and strict obedience. More than fifty years later, when the Middletown survey was replicated, mothers placed autonomy and independence first. The healthiest parenting probably promotes a balance of these qualities in children.”
—Richard Louv (20th century)