Principal Recapture Explained

Principal Recapture Blog image

Principal recapture is a financial concept used to describe the sum of all the principal payments on your mortgage for the year. It’s also referred to as debt payed down or debt reduction. With most traditional mortgages, the amount that goes toward the principal versus interest will change with each mortgage payment. Learn more below.



How Principal Recapture Works

If you’ve ever looked at how mortgage payments are structured, you’ll know they can be complex. This is because most mortgages are amortized to pay off the debt over a period of years. To make mortgages even more complicated, how the amortization is calculated varies depending on the mortgage product you choose and which country you are in Typically, your principal recapture will be the lowest in year one of ownership and it will gradually increase over time.


So how do we calculate it? 

To determine your principal recapture, you will first need to find and review your amortization schedule. An amortization schedule is a graph or document which lists each mortgage payment and outlines how much of each payment goes toward interest and principal. Your schedule may be a table and/or a graph.

How Keyspire Can Help

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We offer many different programs to remove the mystery around real estate investing. Learn about principal recapture in detail and also many other real estate investing strategies. Get started today! From our introductory Masterclass to our one-on-one coaching, there’s something for everyone.

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Kelly Mendonca

Kelly Mendonca is a Communications guru extraordinaire who has served as Keyspire’s Communications Team and Social Media Manager since 2015. She likes all things outdoors including patios, concerts, beaches, lakes, and pizza...all the pizza.

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