Principal Reduction

You pay down your mortgage; that is, in a given month, you owed $1,287 in interest with a required principal reduction of $358. That $358 went against the $283,358 in principal remaining on that mortgage for the picket fenced, moat-protected, 2-story Tudor of your dreams (asbestos removed).

So with that principal reduction, you now owe $283,000. Next month: slightly less interest, as you'll be renting slightly less principal.