Principal refers to the original amount of money you borrow when taking out a mortgage—or the remaining balance on that loan, not including interest. Each mortgage payment you make is split between principal and interest. Paying down the principal builds equity in your property over time. For real estate investors, understanding how principal paydown contributes to long-term wealth is key. While your cash flow provides immediate income, every principal payment quietly increases your net worth. At Meridian, we help investors track both cash flow and equity growth so they can see the full return on their investment.
