If you get a mortgage of $150,000, your principal balance is $150,000.

If you buy a home for $150,000, but you put down $5000 in cash, then the principal balance of your home would be $145,000.

Your mortgage principal can go up or down depending on what type of loan you get. In a standard 30-year fixed loan, your principal balance will gradually go down, slower at first.


In what's known as a negative amortization loan, your balance can actually go up due to the very small payments that some lenders advertise. If you're not paying at least the interest portion of your payment, then your balance is going up. This is not available on any loan besides a specific negative amortization loan.

In any event, your statement will always have a required minimum payment and most companies show what is going to interest and what is going to principal.