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Decoding Your Home Loan Statement: Understanding Key Components and How They Work

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Understand Your Home Loan Statement

Home loan statements can provide a wealth of information, but the detls might be challenging to interpret at first glance. This guide will help you navigate through your statement and make sense of its key elements.

What's in the Limit?

The limit refers to the total amount borrowed for your home loan. As you repay your mortgage over time, this figure decreases. If you're making extra payments beyond the minimum requirement, you'll notice that the balance is lower than the limit, which creates an avlable balance-the difference between these two figures.

Understanding the Balance

This section outlines how much interest is applied to your loan based on various factors:

  1. Your Repayments: Regular mortgage payments reduce this amount.

  2. Interest Charged: This fluctuates according to market conditions and your chosen interest rate.

  3. Offset Account: Any funds held in an offset account lower the balance, thus reducing the interest you'll pay.

A lower loan balance means more savings and potentially a quicker debt payoff.

Is Your Principal Reducing?

Making additional repayments accelerates the reduction of your principal-this is the core amount borrowed agnst which interest charges are calculated. The faster this figure decreases, the less interest accrues over time.

How to Redraw Extra Repayments

Many home loan accounts allow you to redraw extra repayments made above the standard minimum requirements. This feature lets you access funds for future needs or emergencies without penalty once repd.

What Happens if Interest Rates Change?

Home loans typically have variable, fixed, or split rates. If interest rates fluctuate in the market:

  1. Variable Rate: Your repayments will adjust accordingly.

  2. Fixed Rate: The rate remns constant throughout the term of your loan agreement, so your repayment schedule stays unchanged unless you renegotiate early exit fees apply.

For a comprehensive guide on variable and fixed-rate loans, check Bankwest's resources for detled information.

Helpful Guides

To save money on your mortgage:

  1. Regularly reassess your budget to identify areas where you can cut expenses.

  2. Consider refinancing if your current rates are higher than the market average or if new loan features could improve your financial situation.

Explore our tips and guides designed to help you manage debt effectively.

Home Loan Glossary

Confusing home loan jargon demystified:

  1. Principal: The total amount borrowed for a mortgage.

  2. Interest Rate: The cost of borrowing money from the ler, expressed as a percentage.

  3. Offset Account: A linked savings or transaction account that offsets your loan balance to minimize interest charges.

For more information on these terms and others in our glossary, visit Bankwest's online resources.

More Help

Need further assistance?

  1. Reach us through the Bankwest App for secure messaging anytime, anywhere.

  2. Contact us by phone at any hour for immediate support. We're here 247.

  3. Message us on Facebook to connect with a team member directly.

Call our Customer Service Hotline: 13 17 19

Connect with us online:

? Bankwest, a division of Commonwealth Bank of Australia Bankwest ABN 48 123 123 124 AFSL Australian credit licence 234945. All rights reserved. For information about our services and products, including how to use this website effectively, please read the Financial Services Guide provided through the link.

For deposit and payment products, ensure you understand the Product Disclosure Statement PDS avlable from the same link before proceeding with any decision-making process. Fees may apply for banking transactions, and terms and conditions are subject to change without prior notice. For ling products, eligibility criteria and fees must be met; please review the detls provided in your loan application.

Target Market Determinations can also be accessed through our website for specific product offerings.
This article is reproduced from: https://www.bankwest.com.au/help/home-loans/understanding-your-home-loan-statement

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Home Loan Statement Interpretation Guide Understanding Your Housing Debt Breakdown Home Loan Repayment Analysis Tips Managing Interest and Balance in Mortgages Accelerating Principal Reduction Strategies Navigating Variable vs Fixed Rate Options