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hyponamiru.cz / Glossaries / Principal

The principal, in the case of mortgages and other types of loans, is the amount of money borrowed and repaid by the borrower. Principal does not include interest or other fees charged by the bank or non-bank provider for providing the loan or credit. The principal amount is reduced (called amortised) with each regular mortgage payment.

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Amortization

Closely related to the concept of principal is the concept of amortization. Interest is the portion of the regular loan repayment by which the unpaid principal balance is reduced in the case of an annuity. Thus, from each instalment of the loan, a certain amount goes towards the repayment of part of the principal balance and the remainder towards interest. Although the amount of the monthly instalment is fixed, the amount of the principal and interest changes with each instalment. 

Practical example

Your mortgage payment schedule always shows not only the total monthly payment, but also the amount of interest and interest. For example, if the regular monthly mortgage payment is CZK 11,343, the repayments might look like this.

Instalment numberTotal repaymentAmortizationInterestPrincipal balance
1.11 3436 3065 0372 753 694  
2.11 3436 317, 515 025,492 747 376,49
3.11 3436 329,045 013,962 741 047,45
4.11 3436 340,595 002,412 734 706,86
5.11 3436 352,164 990,842 728 354,70
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Frequently asked questions

Do you deal with new mortgages as well as refinancing?

Yes, we deal with both new mortgages as well as refinancing of the existing home mortgage loans. Our specialists will find a solution for you in either case – a solution you can afford.

Can a mortgage be really arranged online?

Yes, it can. Thanks to the latest technology we’re using, you really don’t need to go to the bank to arrange a mortgage. Check it out for yourself.

How long does it take to arrange a mortgage?

A mortgage can be arranged within a month or three. The whole process usually takes around two months. The reason behind it is mostly the approval process on the side of the banks. However, there’re plenty of possibilities to speed up the mortgage application and we know them. Check it out for yourself.

With which Czech banks do you have the best experience?

The most client-oriented bank is certainly Hypoteční banka with their speed of request processing, the service quality, the range of checking accounts they offer, and the interface called “Mortgage Zone”. Other such banks include Komerční banka, Moneta and Raiffeisenbank.

We facilitate consumer credit as a tied agent registered by CNB under company ID number 05736501. We are also registered as an independent consumer credit broker of commercial company Broker Trust, a.s., company ID number: 26439719.

@ 2023 The company Hypo na míru s.r.o. is registered at the Municipal Court in Prague, file number C 269834, company ID number: 05736501.