My fiance and I bought a house in November 2020. We are not married so filing seperately. For "Box 2" in the form 1098 do we split the outstanding mortgage principal?

Whoever actually paid the interest and is on the mortgage is the person who gets to claim it. If you are both on the mortgage, you can each take the amount that you actually paid.

Thank you.  So - we split the PMI 50/50.

But Box 2 ask for the outstanding loan balance.  Would we put in what the original loan was since it was taken out in 2020?  Or do we split it since there are 2 borrowers?

In your particular situation you should split all amounts on your From 1098, including the outstanding loan balance.