Which term describes the total amount borrowed against the value of a property?

The term that best describes the total amount borrowed against the value of a property is mortgage principal. This refers to the initial amount of money that the borrower takes from the lender to purchase the property, which does not include interest or fees associated with the loan.

Understanding the concept of mortgage principal is crucial for borrowers, as it directly influences monthly payments, the overall interest paid over the life of the loan, and the equity built in the property over time. The mortgage principal is the foundation of a mortgage loan agreement, distinguishing it from other financial terms that may refer to additional costs, repayments, or outstanding dues on the loan.

Other terms mentioned may confuse the clear understanding of the amount borrowed. The loan amount may refer to the initial funds that can include various fees, and outstanding balance typically refers to the current amount due, which may include interest accrued. Total debt encompasses all liabilities, not just that related to the mortgage, making it a broader term that does not specifically define the borrowed amount against the property's value.