Subject To Financing - What happens to the loan portion already paid off by seller?

[Brandon Lee]

Hello, I've been watching a lot of Pace Morby videos and researching online, but can't seem to find the answer to this simple question. In a sub-to deal, you are assuming the remaining payments of an existing mortgage. But do you also have to pay off the portion of the loan that's already been paid off by the seller?

Example: Seller's original mortgage was $500k. Seller paid off $200k of principal, leaving $300k remaining on the loan. Buyer assumes payments on the $300k balance, but what happens to the $200k that the seller paid off? How would he benefit from just transferring remaining payments to the buyer, while never getting his $200k back??

Sorry if I'm missing something dumb and obvious, but can't wrap my head around this part. Thank you for any help!