A Breakdown of Your Mortgage Statement

Opening a monthly mortgage statement can feel a bit like opening a piece of mail written in another language. There are numbers, charts and words that sound important—but what do they actually mean?

Start With The Basics

At the top of your statement, you’ll usually find the basics: your name, property address, loan number and payment due date. This section also shows your total amount due and whether you’re current on your loan. If you’re ever unsure whether you’ve paid for the month, this is the first place to check.

Your Monthly Payment

Next comes a breakdown of your monthly payment. Your payment is typically divided into principal (the amount that reduces what you owe) and interest (the cost of borrowing). You can also have money set aside monthly to pay your property taxes and homeowners insurance using something called escrow.

If it seems like your mortgage payment went up, it’s usually because your property taxes or the cost of your homeowners insurance went up. Once each year, your mortgage servicer is required to review your escrow account to ensure there’s enough money there to cover your taxes and insurance premiums. Your monthly payment may increase or decrease because of this analysis, if there are changes to your property taxes or your homeowners insurance.

On a standard fixed-rate mortgage (one where the interest rate won’t change for the life of the loan like a 30-year fixed), the total payment you’ll make on principal and interest stays the same every month. Your mortgage servicer can’t and won’t change this portion of your payment if you have a fixed-rate mortgage. More than 90% of mortgages in the U.S. are fixed rate, according to the Federal Reserve.

Your Outstanding Balance

Your statement will also show your outstanding loan balance. This is the amount you still owe on your mortgage. Over time, you’ll notice this number shrink as more of your payment goes toward principal.

Transaction History

You’ll also see a transaction history, which shows your recent payments and how they’ve been applied. If you have an escrow account and your mortgage servicer pays your taxes and property insurance on your behalf, you’ll also see when your tax and insurance premium payments have been made.

A Snapshot of Your Home

Your monthly mortgage statement isn’t meant to overwhelm you. It’s a snapshot of your loan, your progress and your homeownership journey — all in one place

For educational purposes only.