Principal Paydown
Mortgage principal reduction from payments during the selected period.
Example Result
Sample DataBased on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.
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What This Means
A sample property priced at $385,000 with $2,850/month rent has a principal paydown of $3,129 at Purchase (Month 0). This is equity built automatically as part of your normal mortgage payments — funded by your tenants' rent. Even if a property barely cash flows, the principal paydown represents real wealth creation that is often overlooked when evaluating a deal.
Where This Value Comes From
Principal Paydown is not entered directly — it is calculated from Loan Amount, Mortgage Interest Rate, and Loan Term. See the formula breakdown above and the detailed inputs below.
Inputs That Determine Principal Paydown
Calculations That Use Principal Paydown
Platform Distribution
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Unlock Rental Property CalculatorWhy It Matters
This is equity built automatically as part of your normal mortgage payments — funded by your tenants' rent. Even if a property barely cash flows, the principal paydown represents real wealth creation that is often overlooked when evaluating a deal.
Detailed Explanation
Annual Principal Paydown is the total reduction in your loan balance during the selected year of ownership. Your tenants' rent payments effectively fund this equity building. Early in a mortgage, the principal portion of each payment is small, but it grows over time as the amortization schedule shifts.
Example
Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.
Related Calculations
Extra Principal Payment
UAdditional principal payment made each month beyond the required mortgage payment to accelerate loan
Remaining Mortgage Balance
UCurrent remaining principal balance on the mortgage based on the actual number of months since purch
Cumulative Principal Paydown
UTotal mortgage principal paid down over the actual ownership period.
Debt Service
2Total annual mortgage payments.
Debt Service Coverage Ratio
2Net Operating Income divided by annual debt service — measures ability to cover mortgage.
Loan to Value Ratio
ULoan amount as a percentage of property value.
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