When you make your principal and interest repayments, a proportion repays the principal amount and a proportion goes towards paying the interest amount.
However, for the first half of your loan term, a higher proportion of your minimum monthly repayments goes toward the interest amount. As you continue to repay your loan over the term, a higher proportion of your repayment will go towards your principal amount.
![Graph showing a typical loan example – loan amount $400,000, variable interest rate 5.57%p.a., loan term of 30 years – and how, for the first half of the loan term, a higher proportion of the minimum monthly repayments goes towards the interest amount. As you continue to repay the loan over the term, a higher proportion of the repayment will go towards the principal amount.](/content/dam/bankwest/web-assets/images/body-text-container/content/btc-graph-understanding-home-loan-statements.gif)