Managing mortgages within PocketSmith

How a mortgage is set up and tracked in PocketSmith can vary from user to user! Check out the options below to get your mortgage set up in PocketSmith in a way that best suits you 🏠⚡️

Overview

After gaining feedback from our users 🗣, we've learned that there are different ways in which people like to set up and track their mortgage in PocketSmith.

The simplest method is to track your mortgage account as a balance-only account and only track the mortgage payments coming out of your main account.

Alternative setups include tracking the repayments arriving in the mortgage account, treating the entire repayment as an expense, or only tracking the interest portion as an expense while treating the rest of the mortgage repayment as a transfer to the home loan.

Because mortgages can vary in how they are set up from bank to bank, this means that mortgage transactions 🏡 imported into PocketSmith aren't always the same from one user's PocketSmith account to the next. This also needs to be considered when deciding whether to categorize mortgage transactions as expenses or transfers.

In the following sections of this user guide, we've outlined the most common ways to set up a mortgage in PocketSmith. If the options below don't work for you, please get in touch with some detail about your mortgage and how you'd like to track it. We'll do our best to come up with an option for you! 

Tracking mortgages using Track Balance changes 📉

The simplest way to include your Mortgage is to use our ' Track Balance changes' feature to track the balance of the account. This means you only need to track and categorize the repayment transactions leaving your main bank account, which is simpler than managing separate repayment and transfer transactions.

This method has a few steps when first setting it up, but will be the easiest method to easily view your mortgage repayments as an expense while keeping your mortgage account balances up to date for a better overview of your total net worth! ✨

This method is great if you want to have your mortgage accounts in your PocketSmith for an accurate overview of your current net worth while being able to easily budget for your repayments.

For more about this method and how to set it up, check out: Tracking mortgages using Track Balance changes

Categorizing mortgage repayments as transfers (with the interest portion as an expense)

This is our other simplest method to set up in your PocketSmith with your repayments for the loan will be seen as a transfer, with the interest on the loan being seen as an expense 🙌🏼

This method is great if you want an accurate forecast of your net worth that also prevents double-counting your expenses, i.e. the principal payment and the interest payment. The interest portion can be categorized as an expense to reflect the true cost.

To accurately represent net worth, it's best to categorize the mortgage repayment into the loan account as a transfer, and then treat the actual interest transactions that are automatically debited from the loan account as the expense - the interest transactions within the mortgage account are what causes a change in your net worth.  

To learn more about this method and how to set it up, check out: Categorizing mortgage repayments as transfers (with the interest portion as an expense)

Categorizing mortgage repayments as an expense (with the interest portion as a transfer) 

This is our most advanced method to set up that has a few steps involved, but is great if you’re want to see your mortgage repayments as an expense while keeping the transactions in from your mortgage account in your PocketSmith 🎉

This method involves creating filters as well as categories and budgets to track your repayments as an expense in reports and budgets, while still creating an accurate net worth forecast that takes into account the reduction in your loan balance as well as the interest charges.

To learn more about this method and how to set it up, check out: Categorizing mortgage repayments as an expense (with the interest portion as a transfer)

Tracking mortgages using a Liability 🏡

If there is no feed connection available for your mortgage, you can track this in PocketSmith using a liability instead. Liabilities and assets in PocketSmith are different from regular bank accounts in that they don't contain transactions 💪🏼

In place of transactions, you can use budgets to track your budgeted payments when paying down debt, reduce the amount owing on that liability, and use the Calendar page to make any balance adjustments.

To learn more about this method and how to set it up, check out: Tracking mortgages using a Liability