Remaining loan balance
By Jude Wallis
The remaining loan balance is the principal still owed after a given number of payments. It is the original balance grown at the loan rate, less the payments made so far.
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The balance does not fall in a straight line. Early payments are mostly interest, because interest is charged on a large balance, so the principal portion starts small and grows every month. Halfway through the term of a long loan, well over half the original balance is usually still outstanding.
That curve is why the figure is worth computing before making a decision. Refinancing, selling, cancelling mortgage insurance and paying a loan off early all turn on the balance today rather than on the fraction of the term completed.
A payoff quote is not the same number. It adds interest accrued since the last payment and any fees, so it sits slightly above the scheduled balance. The remaining loan balance calculator computes the scheduled figure, how amortisation works is the schedule behind it, and the mortgage payoff calculator applies extra payments to it.