Related Terms: Mortgage Balance
The loan balance is what you have left to pay on the mortgage principal. The difference between the original mortgage amount and the amount you’ve made in principal payments gives you the loan balance.
Knowing the balance on your loan is important. It helps you stay on top of your payments and make decisions about making prepayments. There are online resources such as amortization calculators that can help you figure out the monthly payments as well as how many you still have to make to pay off the loan.
There are times when the balance is not paid during the term of the loan. This can occur when a balance, or a “balloon payment” is still owed because the loan didn’t fully amortize. On the other hand, the loan balance can be paid off early by making prepayments towards the principal in order to reduce the amount paid towards interest.