In real estate finance, an Interest-Extra Note is a promissory note that requires the borrower to make equal periodic payments toward principal, usually on a monthly basis, plus interest on the outstanding balance. Because the principal portion of each payment remains constant, the interest portion declines as the principal balance is reduced.
As a result, the total payment amount decreases over time. This type of loan structure differs from a fully amortized loan, where total payments remain the same, and is sometimes used in specialized financing arrangements.
