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:
“Rather than have it the principal thing in my son’s mind, I would gladly have him think that the sun went round the earth, and that the stars were so many spangles set in the bright blue firmament.”
—Thomas Arnold (1795–1842)
“At last I feel the equal of my parents. Knowing you are going to have a child is like extending yourself in the world, setting up a tent and saying “Here I am, I am important.” Now that I’m going to have a child it’s like the balance is even. My hand is as rich as theirs, maybe for the first time. I am no longer just a child.”
—Anonymous Father. Ourselves and Our Children, by Boston Women’s Health Book Collective, ch. 5 (1978)