The mortgage principal is the original amount of money you borrow from a lender to purchase your home. For example, if you take out a $200,000 loan, that $200,000 is your principal. As you make monthly mortgage payments, a portion of each payment goes toward reducing this principal, while another portion covers interest, which is the cost of borrowing the money. Paying off your principal faster can save you thousands in interest over the life of your loan. To pay it off sooner, you can make extra payments specifically toward the principal, refinance to a shorter loan term, or allocate windfalls like bonuses or tax refunds toward your mortgage. Always confirm with your lender that extra payments are applied directly to the principal to maximize savings and reduce your loan balance more quickly.

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