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)
“As the House is designed to provide a reflection of the mood of the moment, the Senate is meant to reflect the continuity of the past—to preserve the delicate balance of justice between the majority’s whims and the minority’s rights.”
—Lyndon Baines Johnson (1908–1973)