Principal
Lending & MortgagesThe original amount of money borrowed, or the remaining balance on a loan excluding interest.
Example
Example: Your mortgage payment is $2,100/month. In the first year, approximately $600 goes to principal and $1,500 to interest. By year 15, the split is roughly equal: $1,050 each. By year 25, $1,700 goes to principal and only $400 to interest. The total principal is always the same — it is the interest allocation that shifts over time.