How to understand home loan mortgage statements

A mortgage statement is a document provided by your lender that contains various details about your home loan, including how much of your loan you have repaid and how much is remaining. It will also include additional information, such as your interest rate, and how much money you’re saving in interest charges thanks to your offset account. Therefore, it is important to understand your mortgage statement clearly.

Some common terms found on a mortgage statement include:

Statement Period

The dates covered by the statement, which is typically a month. However, some lenders might issue a mortgage statement twice a year, or once every quarter. 

Opening and Closing Balance

Your opening balance is how much money is left to repay on your loan at the start of the statement period.

Your closing balance is how much money is left to repay on your loan at the end of the statement period.

If you have made principal and interest repayments during the period, then your closing balance will be smaller than your opening balance.

Credits and Debits

Credits refers to any money you have paid into your home loan during the statement period. Debits refers to any money that is removed from your loan or offset account during the statement period, such as when you redraw funds.

Interest Summary

The interest summary will tell you your current interest rate and how much interest was charged during the statement period. This may include the interest savings due to money deposited in any offset account(s) you have.

Total Balance Outstanding

The total balance outstanding is the amount left on your home loan after all your debits and credits have been taken into account at the end of your statement period.

Your bank statements summarise the activity in your transaction accounts during the statement period. They contain the bank logo, your full name and address, account number, your opening and closing balance, and all transactions during the statement period.

A bank statement is one of the documents that the lender will require as a part of your mortgage application. To secure a mortgage, your bank statements are a vital piece of information for the lender that shows your spending habits, proof of income, and whether you are a responsible borrower.  

Lenders usually require two to three months of your latest bank statements along with your transaction history. These can be downloaded from your internet banking or sent as a monthly statement via post or email.  

Once you’ve used your bank statements to help you successfully apply for a mortgage, you should also start being sent regular mortgage statements by your lender.

It’s one thing to understand your mortgage statement. It’s another thing to make good use of the information your statements contain.

Your mortgage statements contain all the key information about your home loan. This can give you a starting point for comparing your current mortgage to other offers on the market and work out if there’s another deal out there that may better suit your needs. If it looks like you may be better off with another lender, you may want to consider refinancing.

Using the interest rate, remaining balance, repayment amount and other information on your mortgage statement as a baseline, you can use a home loan calculator to work out how your costs may change by making small adjustments to your home loan, such as increasing your repayment frequency, making extra repayments, or depositing more money into your offset account.

If you need more help working out which home loans may be best for you, you could consider contacting a mortgage broker. A reliable broker whom you trust can look over your mortgage statements and help you compare your current loan to other deals that may be available, including broker-exclusive options that aren’t typically advertised.