Tracking an Interest-only mortgage
How a mortgage is set up and tracked in PocketSmith can vary from user to user! Check out how to manage your Interest-only mortgage below 🏠⚡️
In this user guide
Overview
While this may seem tricky to manage in PocketSmith, we have a couple of different options you can follow to track this kind of mortgage in your account, which are both easy to follow!
Keep reading this guide for the different options for managing your interest-only mortgage in your PocketSmith.
Note
If you are tracking your mortgage in your PocketSmith, we also recommend adding your house as an asset to make your net worth more accurate. Adding an asset to Net Worth
Track Balance Changes
The best option for tracking your interest-only mortgages is by following our Track Balance Changes method. Following this method will keep your mortgage account up-to-date while only having to budget and categorise your expense repayment transaction 🎉
Because the value of an interest-only mortgage does not change while in its interest-only term, you do not need to forecast your mortgage account.
Mortgage as a liability
Adding the liability
If your mortgage account doesn't have an available feed connection, or you're not wanting to use feed connections, you can instead add your mortgage as a liability.
The balance of the liability should not need to change while your mortgage is in its interest-only term. If the balance of your loan does change periodically duirng its interest-free term and needs to be updated in PocketSmith, you can update the value of the liability on the calendar page.
Managing your repayments
For your mortgage repayment transactions, these can assigned to thier own bill category - you could call this Mortgage Repayments.
Note
If you have multiple mortgages, we recommend creating a separate category per mortgage, with each mortgage repayment assigned to its respective category.
You will then need to create a repeating expense budget on your Mortgage Repayments category reflecting the amount and frequency of your mortgage repayment.
For example, if your full mortgage repayment for one loan is $2500/month and you pay this on the 1st of every month - you would create a monthly repeating expense budget for -$2500:
Note
You will need to set separate repeating expense budgets on each of your Mortgage Repayment categories if you have more than one mortgage.
Your mortgage repayments will now be included as an expense in your budget, while the loan as a liability will show you your loan amount 🙌🏼