Principal balance, in regards to a mortgage

Mortgage loan

A mortgage loan is a loan secured by real property through the use of a mortgage note which evidences the existence of the loan and the encumbrance of that realty through the granting of a mortgage which secures the loan...

 or other debt instrument, is the amount due and owing to satisfy the payoff of the underlying obligation.

Amortized

Amortization (business)

In business, amortization refers to spreading payments over multiple periods. The term is used for two separate processes: amortization of loans and amortization of intangible assets.-Amortization of loans:...

 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

Interest-only loan

An interest-only loan is a loan in which, for a set term, the borrower pays only the interest on the principal balance, with the principal balance unchanged...

does not require any monies be paid toward the principal balance each month, but is allowable.