What does Principal mean?

In terms of mortgage lending, the principal is that amount of money which you basically borrow, without the added interest and other potential penalties you have to pay. So, if you take out a mortgage of £100,000 for a period of 30 years, with an interest rate of 6, 25%, here is how your loan schedule will look like: your monthly repayment is approx. £616, your total amount paid for interest ~ £122,000, and your total payments repayment plus interests will give a total of ~ £220,000. You can actually see the difference of £120,000 which is the sum you pay on interests and other fees and is not part of the principal.