Your home loan statement is sent annually (and is usually accessible online at any time). It contains a wealth of information about your loan — but many borrowers never read it beyond checking the balance. Understanding your statement helps you: verify your interest rate is correct, track how much of each repayment goes to principal vs interest, monitor fees being charged, check your offset and redraw balances, and prepare your tax return (for investment properties). This guide walks through every element.
Key Elements of Every Home Loan Statement
Your statement will include the following key elements:
Account number and product name: Identifies your specific loan and the product type (e.g., 'Variable Rate Home Loan', 'Fixed Rate Investment Loan', 'Package Plus'). If you have multiple loan splits, each will have its own account number and statement.
Current interest rate: The rate currently being charged on the loan. For variable rates, this can change at any time. For fixed rates, it remains constant until the end of the fixed period. Verify this matches the rate you were told — and compare it to the lender's currently advertised rate for new customers. If your rate is significantly higher, it is time to negotiate or refinance.
Opening balance: The loan balance at the start of the statement period.
Closing balance: The loan balance at the end of the statement period. The difference between opening and closing balance shows how much principal you have paid down during the period.
Repayments made: The total of all repayments during the period — including regular scheduled repayments and any additional payments.
Interest charged: The total interest charged during the period. This is the 'cost' of the loan for that period. For a $500,000 loan at 6.5%, interest is approximately $32,500 per year ($2,708/month).
Principal repaid: The portion of your repayments that reduced the loan balance. In the early years of a P&I loan, most of each repayment goes to interest — only a small portion reduces the principal. Over time, this ratio shifts toward more principal and less interest.
Fees charged: Any fees debited during the period — annual package fee, account-keeping fee, statement fee, valuation fee, etc. Check these against what was disclosed in your loan contract.
Offset account balance: If you have an offset account, the statement (or online banking) will show the offset balance. The interest saving from the offset is reflected in the lower interest charged — but not as a separate line item.
Redraw available: The amount you can redraw from additional repayments made above the minimum. This represents the difference between what you have paid and what you were required to pay.
Next repayment date and amount: When your next repayment is due and how much.
Compare Your Rate to the Lender's New Customer Rate
Your annual statement shows your current rate. Compare this to the rate the same lender is advertising for new customers on the same product. If the gap is more than 0.15%, call the retention team and negotiate. This single check can save thousands per year.
The Principal vs Interest Split: Why It Matters
In the early years of a standard 30-year P&I home loan, the majority of each repayment goes to interest — not principal. This surprises many borrowers.
Example: $600,000 loan at 6.5% over 30 years. Monthly repayment: $3,793.
Year 1 breakdown (approximate): Monthly interest: $3,250. Monthly principal: $543. After 12 months of repayments ($45,516 total), only approximately $6,500 has reduced the loan balance. The remaining $39,000 was pure interest cost.
Year 10 breakdown: Monthly interest: $2,850. Monthly principal: $943. The ratio has shifted — more goes to principal.
Year 20 breakdown: Monthly interest: $1,950. Monthly principal: $1,843. Nearly half of each repayment now reduces the balance.
Year 28 breakdown: Monthly interest: $600. Monthly principal: $3,193. The vast majority now reduces the balance — but you have already paid most of the interest in earlier years.
This is why extra repayments in the early years have such a dramatic impact — every additional dollar reduces the principal balance, which reduces the daily interest charge, which means more of every subsequent repayment goes to principal. The compounding effect accelerates over time.
Your statement shows this breakdown (either directly or through the opening/closing balance difference). Use it to track your progress and motivate extra repayments.
| Year | Monthly Repayment | To Interest | To Principal | % to Principal |
|---|---|---|---|---|
| Year 1 | $3,793 | $3,250 | $543 | 14% |
| Year 5 | $3,793 | $3,100 | $693 | 18% |
| Year 10 | $3,793 | $2,850 | $943 | 25% |
| Year 15 | $3,793 | $2,450 | $1,343 | 35% |
| Year 20 | $3,793 | $1,950 | $1,843 | 49% |
| Year 25 | $3,793 | $1,200 | $2,593 | 68% |
| Year 30 | $3,793 | $200 | $3,593 | 95% |
Using Your Loan Statement for Tax and Financial Planning
For investment property owners:
Your annual loan statement is a critical tax document. The total interest charged during the financial year is tax-deductible (assuming the loan purpose is 100% for the investment property). Your accountant needs this figure for your tax return.
Most lenders provide a 'tax summary' or 'annual interest summary' for the financial year (1 July – 30 June) — either as part of the annual statement or as a separate document. This summary shows: total interest charged, total fees paid (also deductible), and the loan balance at 30 June.
If your loan has multiple splits (e.g., one for the investment, one for the owner-occupied home), ensure you claim only the interest on the investment portion. The owner-occupied interest is never deductible.
Borrowing costs deduction: In the year you took out the loan, borrowing costs (application fee, valuation fee, legal fees, stamp duty on the mortgage, LMI) exceeding $100 are deductible over 5 years (or the loan term if shorter). Your original loan documents and settlement statement provide these figures.
For owner-occupiers:
While your interest is not tax-deductible, your statement is still valuable for financial planning. Use it to: track your loan paydown progress (how much principal you have reduced), verify your rate is competitive, check that you are on track for your payoff target, and ensure no unexpected fees are being charged.
Yearly health check: Once a year, when you receive your annual statement, do three things: (1) compare your rate to the market and negotiate if needed, (2) review your offset and redraw balances to ensure they are optimised, and (3) check your remaining term and consider whether you can increase repayments to shorten it.
Request a Tax Summary for Your Investment Loan
If your lender does not automatically provide a financial year tax summary, call and request one. It shows total interest charged and total fees for the year — the two key figures your accountant needs. Most lenders provide this for free through online banking or on request.
- ✓Investment property: total interest charged is tax-deductible
- ✓Borrowing costs over $100 are deductible over 5 years
- ✓Owner-occupied interest is never tax-deductible
- ✓Request a financial year tax summary from your lender
- ✓Compare your rate to market rates annually
- ✓Check offset and redraw balances are optimised
- ✓Track principal vs interest split to monitor progress
- ✓Review fees for unexpected or undisclosed charges
Frequently Asked Questions
About the Author
Sakib Manzoor
Senior Finance Wellness Expert
Sakib Manzoor is the founder of Secure Finance and brings extensive experience in Australian mortgage broking and financial wellness. Specialising in helping clients achieve their property finance goals through personalised strategies and expert guidance, Sakib is FBAA accredited and committed to providing clear, actionable advice. All content is written to meet Australian regulatory standards and is regularly updated to reflect current market conditions.