What is a mortgage statement and why should you care?
Let's be real—mortgage statements aren't exactly light reading. But your mortgage statement isn't just paperwork; it's a financial roadmap showing exactly where your money is going and how much progress you're making toward owning your home outright.
Whether your lender sends statements monthly, quarterly, or biannually, knowing how to interpret every section can help you:
- Track your loan progress accurately
- Spot errors or unexpected charges
- Identify opportunities to save thousands in interest
- Make informed decisions about refinancing
- Prepare properly for tax time
Breaking down your mortgage statement section by section
Your mortgage statement may look overwhelming at first glance, but we'll demystify each component so you can navigate it with confidence.
1. Statement period and account details
What you'll see:
- Statement number
- Statement period (e.g., March 1-31, 2025)
- Account number
- Borrower name(s)
- Property address
- Loan type (fixed, variable, split, etc.)
- Original loan amount
- Loan start date
Why it matters: These details confirm which account and timeframe the statement covers. The loan type is particularly important as it determines how your interest is calculated and whether your repayments might change over time.
2. Opening and closing balance
What you'll see:
- Opening balance: what you owed at the start of the period
- Closing balance: what you owe after all transactions
Why it matters: The difference between these numbers shows your actual progress in reducing your loan during this period. If your closing balance is higher than your opening balance, it may indicate that you've redrawn funds or that interest charges exceeded your repayments.
From a CBA statement: "Opening balance: $328,085.96 | Closing balance: $326,588.33" This shows a reduction of $1,497.63 during the statement period.
3. Interest details
What you'll see:
- Current interest rate
- Interest charged for the period
- Year-to-date interest totals
Why it matters: This section reveals exactly how much interest you're paying and at what rate. For variable rate loans, monitoring rate changes is crucial as even small increases can significantly impact your repayments over time.
From an ANZ statement: "Interest rate: 4.66% p.a. | Interest charged this period: $2,374.71"
4. Transaction details
What you'll see:
- Date of each transaction
- Description (regular payment, extra payment, interest charged, fees, etc.)
- Amount (debits and credits)
- Running balance after each transaction
Why it matters: This chronological breakdown helps you verify that all your payments were applied correctly and understand how each transaction affects your overall balance.
5. Repayment information
What you'll see:
- Required minimum repayment amount
- Repayment frequency (weekly, fortnightly, monthly)
- Next payment due date
- Total repayments made during the period
- Breakdown of payment allocation (principal vs. interest)
Why it matters: This section confirms whether you're meeting your minimum repayment obligations and shows how much of your payment is actually reducing your principal versus paying interest.
6. Features and facilities
What you'll see:
- Available redraw amount
- Offset account balance and interest savings
- Available loan features (e.g., repayment holiday, splitting options)
Why it matters: Understanding these features can help you optimise your mortgage strategy. For instance, maintaining a healthy offset balance can significantly reduce your interest charges over time.
What your mortgage statement doesn't tell you (but should)
While statements provide extensive information, they often miss certain insights:
- Comparison to market rates - Your statement won't tell you if better rates are available elsewhere
- Projected loan term - How your current repayment amount affects your overall loan timeline
- Interest savings opportunities - Specific strategies that could save you money based on your exact situation
How to use your mortgage statement to save thousands
Now that you understand your statement, here's how to leverage this knowledge:
1. Verify your interest rate is competitive
Take your current rate from your statement and compare it to today's market offerings. If there's a significant gap, it might be time to refinance or ask your current lender for a better rate.
2. Check your principal reduction
Subtract your closing balance from your opening balance, then subtract the interest charged. This gives you the actual principal reduction for the period. If this number seems low, consider strategies to increase it.
3. Maximise offset benefits
If your statement shows an offset account, ensure you're routing as much money through it as possible—even temporarily parking funds there can reduce interest charges.
4. Look for fee opportunities
Review any fees on your statement. Some (like annual fees) might be negotiable, while others (like late payment fees) can be avoided altogether.
5. Track your equity growth
As your closing balance decreases over time, your equity increases. This can open doors to opportunities like investment properties or reducing your Lenders Mortgage Insurance.
Common mortgage statement mistakes to avoid
- Ignoring small fee increases - Even minor fee hikes can add up substantially over a 30-year loan
- Overlooking interest rate changes - Variable rates can change without much fanfare
- Missing payment due dates - This can trigger late fees and potentially affect your credit score
- Not checking transaction accuracy - Errors do happen, and they're easier to fix when caught early
- Focusing only on the minimum payment - Making only minimum payments maximises the interest you'll pay over time
How often should you review your mortgage statement?
While monthly reviews are ideal, quarterly at minimum is recommended. Set a calendar reminder to ensure you're regularly checking in on your largest financial commitment.
Digital vs. paper statements: Which should you choose?
Digital statements offer convenience, searchability, and environmental benefits, but paper statements can be easier to file for some people. Whichever format you choose, develop a system for reviewing and storing them.
Here's how long you should keep your statements:
- Current year statements: Easily accessible for regular review
- Previous 2-5 years: Stored for tax purposes
- Full loan history: Keep digital copies for your complete records
The bottom line: Your mortgage statement is a powerful financial tool
Understanding your mortgage statement isn't just about being financially literate—it's about taking control of your largest debt and potentially saving tens of thousands of dollars over the life of your loan.
By regularly reviewing, understanding, and acting on the information in your mortgage statement, you're empowering yourself to make smarter decisions about your home loan, potentially shave years off your mortgage, and build wealth faster.
Need help optimising your mortgage based on your statement insights? Book a free 30-minute consultation with one of our mortgage brokers who can analyse your statement and identify opportunities to save.
