Read Your Mortgage Statement: Key Sections Explained

Your mortgage statement shows your payment amount, how it’s split between principal and interest, your escrow account balance, remaining loan balance and recent transaction history. Review it monthly to ensure payments are applied correctly, track your equity growth and catch any errors. Key sections include the payment due, amount breakdown, escrow details and year-to-date totals for tax purposes.

What Your Statement Includes

Standard Statement Sections

Section	What It Shows
Account information	Loan number, property address, contact info
Payment information	Amount due, due date, late fee date
Payment breakdown	Principal, interest, escrow amounts
Transaction activity	Recent payments and adjustments
Account summary	Outstanding balance, escrow balance
Year-to-date totals	Interest paid, taxes paid, insurance paid

Payment Information Section

Key Elements

Payment due date:

When your payment is due (usually 1st of month)
Grace period end (usually 15th)
Late fee amount if past grace period

Payment amount:

Total monthly payment
May include principal, interest, escrow
May show minimum payment vs full payment

Where to send payment:

Mailing address
Online payment options
Phone payment information

Sample Payment Section

Payment Due Date: July 1, 2024
Amount Due: $2,347.82
If Received After: July 16, 2024
Late Charge: $94.00

Payment Breakdown

Understanding the Split

Your payment is divided among:

Component	Description
Principal	Reduces your loan balance
Interest	Cost of borrowing (goes to lender)
Escrow	Held for taxes and insurance
PMI/MIP	Mortgage insurance (if applicable)

Sample Breakdown

Monthly payment: $2,347.82

Component	Amount	% of Payment
Principal	$412.18	17.6%
Interest	$1,485.64	63.2%
Property tax escrow	$325.00	13.8%
Insurance escrow	$125.00	5.4%
Total	$2,347.82	100%

Why Interest Is So High

Early in your loan, most payment goes to interest. This is normal amortization:

Year 1: ~85% interest
Year 15: ~50% interest
Year 28: ~15% interest

Watch principal portion grow over time as evidence of equity building.

Escrow Account Details

What Escrow Covers

Expense	Paid From Escrow
Property taxes	Yes
Homeowners insurance	Yes
Flood insurance	If required
PMI/MIP	Sometimes
HOA fees	Rarely

Escrow Section on Statement

Shows:

Current escrow balance
Next scheduled disbursements
Projected escrow payments
Any shortage or surplus

Sample Escrow Information

Escrow Balance: $2,847.23
Next Disbursement: County Tax - $1,842.00 (August 15)
Projected Year-End Balance: $1,200.00

Escrow Analysis

Annually, your servicer reviews escrow:

Calculates upcoming tax and insurance
Adjusts monthly escrow amount
May result in payment increase or decrease
You receive escrow analysis statement

Transaction Activity

What It Shows

Recent account activity:

Payments received
How payments were applied
Escrow disbursements
Fees or charges
Adjustments

Sample Activity

Date	Description	Amount
06/03/24	Payment received	$2,347.82
06/03/24	Applied to principal	$408.42
06/03/24	Applied to interest	$1,489.40
06/03/24	Applied to escrow	$450.00
06/15/24	Insurance disbursement	-$1,500.00

Verify Payments Applied Correctly

Check that:

Payment date matches when you paid
Full amount was applied
No unexpected fees
Extra payments went to principal

Account Summary / Balance Information

Key Numbers

Outstanding principal balance: Your remaining loan amount

Original loan amount: What you borrowed initially

Interest rate: Your current rate (fixed or variable)

Next payment due: Upcoming payment date

Sample Summary

Original Loan Amount: $350,000.00
Outstanding Principal: $342,847.23
Interest Rate: 6.50% Fixed
Maturity Date: July 1, 2053
Next Payment Due: August 1, 2024

Tracking Your Progress

Compare outstanding principal to original:

$350,000 - $342,847 = $7,153 paid down
After 1 year on 30-year loan, this is typical
Equity = home value - balance

Year-to-Date Information

Interest paid YTD: Needed for tax deduction (matches Form 1098)

Property taxes paid YTD: Deductible if you itemize

PMI paid YTD: May be deductible (check current tax law)

Sample YTD Section

Year-to-Date Summary (January 1 - June 30, 2024):
Interest Paid: $8,937.84
Property Taxes Paid: $1,842.00
Insurance Paid: $1,500.00
PMI Paid: $612.00
Principal Paid: $2,449.26

Use for Tax Planning

Estimate annual interest for deduction planning
Verify matches Form 1098 in January
Track property taxes for SALT deduction

Common Statement Questions

Why Did My Payment Increase?

Common reasons:

Escrow analysis found shortage
Property taxes increased
Insurance premiums increased
ARM rate adjusted
PMI wasn’t removed when expected

What to do:

Review escrow analysis letter
Compare to previous year’s taxes/insurance
Contact servicer if unclear

What’s an Escrow Shortage?

When your escrow account doesn’t have enough to cover upcoming expenses:

Property taxes went up
Insurance premiums increased
Escrow was underfunded

Resolution:

Pay shortage as lump sum, or
Spread over 12 months (payment increases)

What If I See an Error?

Common errors:

Payment not applied correctly
Wrong amount credited
extra payment not applied to principal
Fees you don’t recognize

Steps:

Document the error
Contact servicer in writing
Keep copies of everything
Follow up until resolved

Understanding Different Servicers

Why Your Servicer May Change

Loans are often sold or transferred:

Original lender sells servicing rights
New servicer takes over
You receive transfer notice

What changes:

Where you send payments
Online portal
Customer service contact

What doesn’t change:

Loan terms
Interest rate
Payment amount (unless escrow changes)

Working with Your Servicer

Your servicer handles:

Collecting payments
Managing escrow
Sending statements
Customer service
Loss mitigation (if needed)

Contact for:

Payment questions
Escrow issues
Statement questions
Hardship assistance

Online Statement Access

Benefits of Online Access

View statements anytime
Download for records
Set up autopay
Make extra payments
Track payment history

What to Look For Online

Most servicer portals show:

Current statement
Payment history
Escrow details
Document center (1098, etc.)
Payment options

Keeping Records

What to Save

Keep permanently:

Closing documents
Original loan terms

Keep 7 years:

Annual 1098 forms
Escrow analysis statements
Correspondence with servicer

Keep 1-3 years:

Monthly statements (or access online)
Payment confirmations

Digital Organization

Download statements monthly or quarterly
Organize by year
Back up important documents
Note when servicer changes

Reading Your 1098

Annual Tax Document

In January, you receive Form 1098 showing:

Box 1: Mortgage interest received
Box 2: Outstanding principal
Box 3: Mortgage origination date
Box 4: Refund of overpaid interest
Box 5: Mortgage insurance premiums
Box 10: Property taxes paid

Verify Against Statements

1098 should match your YTD interest total from December statement. If not, contact servicer.

Frequently Asked Questions

How often do I receive a statement?

Monthly, either by mail or electronically. You can usually choose your preference through your servicer’s portal.

Why does so little go to principal?

Amortization front-loads interest. Early payments are mostly interest. This is normal and improves over time. Extra principal payments accelerate equity building.

What if I don’t receive my statement?

Contact your servicer immediately. Your payment is still due regardless of whether you receive a statement. Set up online access as backup.

Can I change my payment due date?

Some servicers allow this. Contact customer service to ask. Not all servicers or loan types permit changes.

What’s the difference between payment due and payoff amount?

Payment due is your regular monthly amount. Payoff amount is what you’d need to pay to completely satisfy the loan (including accrued interest and fees).

Should I keep old statements?

Keep at least 1-2 years of statements. Longer if you might need them for taxes or disputes. Digital copies work well for long-term storage.

How do I verify my statement is correct?

Check that payment was applied correctly, interest calculation seems reasonable for your rate and escrow balance matches expected accumulation. Contact servicer if numbers seem wrong.

Learn to interpret your mortgage statement clearly