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What Is a Mortgage Balance?

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Closeup of model home and coins balancing on wooden weighing scale, representing a mortgage balance.

Not all mortgages are created equal, and many of the important details can hide deep inside the contract’s terms. This can make life for mortgage holders confusing and stressful, but our mission is to provide clarity. We want to help clear up that confusion, one term at a time, starting from the mortgage pre-approval process onwards.

Mortgage Balance Definition: Your mortgage balance, or remaining balance, is the total amount of money you still owe on your home loan at any given time. 

It’s the original loan amount you borrowed minus the principal portions of all the payments you’ve made so far.

How Your Mortgage Balance Works

Each mortgage payment you make has 2 main parts: principal and interest. How these parts are applied to your loan changes over time through a process called amortization. This process is designed to repay your entire loan over a specified period.

  • Principal: This is the part of your payment that goes directly toward paying down your loan amount. Paying down your principal builds your home equity, a valuable asset you can potentially borrow against later. You can learn more about accessing your home equity on our services page.
  • Interest: This refers to the cost of borrowing money from your lender. This portion of your payment goes to the lender and does not reduce your loan balance.

The Amortization Process

When you first get your mortgage, your loan balance is at its highest. Because of this, a larger portion of your payment goes toward interest. It may feel like you are not making much progress on the loan itself at the beginning.

As you continue to make payments, your balance slowly decreases. Over time, less of your payment is needed for interest, so more of it goes toward paying down the principal. Near the end of your loan term, almost your entire payment reduces your final mortgage balance. You can see this effect for yourself by inputting different scenarios into a handy mortgage calculator.

How To Check Your Current Mortgage Balance

It’s a good idea to know your current mortgage balance, especially when you plan for your financial future. You can find this information in a few simple ways. Staying on top of this number helps you track your progress.

Review Your Mortgage Statement

Your lender sends you a mortgage statement, typically on a monthly or annual basis. This document outlines your most recent payment, your current mortgage balance, and the interest accrued. It’s a complete snapshot of your loan information.

Log In To Your Lender’s Portal

Most lenders have an online website or a mobile app where you can manage your account. Once you log in, you can see your up-to-date mortgage balance and payment history at any time. This is often the quickest way to check your balance.

Call Your Lender Directly

You can always call your lender’s customer service number for information. A representative can give you your current balance over the phone. You will just need to verify your identity for security purposes.

Mortgage Balance vs. Payoff Amount

Your mortgage balance is not the same as your mortgage payoff amount. This is a common point of confusion for many homeowners. The payoff amount is the total sum required to completely close your mortgage account.

The payoff amount will be slightly higher than your current balance. This is because it includes any interest that has accrued since your last payment. It may also include administrative fees your lender might charge to close the loan.

You’ll need an official payoff statement from your lender if you plan to sell your home or are considering refinancing your mortgage. This statement gives you the exact figure you need to pay to be mortgage-free.

Ways To Lower Your Mortgage Balance Faster

You can take steps to pay down your mortgage principal more quickly. This can save you a lot of money on interest over the life of the loan. 

Before making extra payments, review your mortgage agreement to determine if there are any prepayment privileges or penalties. This is also a great thing to review during your mortgage renewal, as you may be able to switch to a more flexible product.

Make Lump-Sum Prepayments

If you receive extra money—like a work bonus, an inheritance, or a tax refund—you can make a one-time payment. This lump-sum payment can be applied directly to your principal. This is a powerful way to reduce your balance.

Increase Your Regular Payment

Even adding a small extra amount to each monthly payment can make a big difference over time. This extra money goes straight to your principal balance. This helps reduce your loan and can shorten your amortization period.

Change Your Payment Frequency

You might be able to switch from monthly to an accelerated bi-weekly or weekly payment schedule. This means you’ll make the equivalent of one extra monthly payment each year. Contact one of our mortgage brokers to determine if this option is suitable for you.

Your Partners for Mortgage Clarity & Support

Understanding your mortgage balance is a key part of managing your home financing. It helps you track your progress, build equity, and make informed decisions about your financial future. You should feel confident about where you stand with your loan.

At Mortgage Connection, we believe in transparency and clarity. If you have questions about your mortgage, whether it’s for purchasing a new home or refinancing an existing one, our team can help. As experienced mortgage brokers in Calgary, we can guide you through the details and help you find a solution that fits your goals.

Written by
Josh Higgelke

Josh is a natural leader and driven entrepreneur. It is fitting that he is a Managing Partner and Broker of Record for Mortgage Connection. Josh has always had a love for everything real estate related and became a Mortgage Broker in 2007. He has since been recognized as one of the top leaders in his field. His energy for life is contagious and he has a passion for the mortgage business. Josh is a builder of systems and people. He is actively involved in both residential lending and commercial lending and strives for Mortgage Connection to be the best option for all real estate financing needs.

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