In the mortgage market, factor represents the ratio of the principal outstanding (in a mortgage loan) to the original balance of the mortgage pool, expressed as a decimal. It is usually represented as the monthly principal and interest payment related to a $1,000 mortgage loan.

For example, in a loan in which the monthly payment for a $100,000 loan at 6% interest rate  for 30 years at a mortgage factor of 5.5, the mortgage factor gives the amount of money that would be paid monthly per thousand dollars of the loan, reflecting the value of the loan outstanding related to the original balance.