Mortgages: Tracking mortgages using Track Balance changes

After gathering feedback from our users, we've learned that people have different preferences for how they set up and track their mortgages in PocketSmith.

The simplest method is to track your mortgage account as a balance-only account, using our 'Track Balance changes' feature, and only track the mortgage payments coming out of your main account, which we cover in this guide. This method has a few steps when first setting it up, but it will make it easy to 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! ✨

For most transactional accounts in PocketSmith, the historic balances are calculated based on transaction data within the account. However, our Track Balance Changes feature is designed to accurately record balance changes as they occur, without requiring transactions.

Using this feature on your mortgage accounts means that their balances will always be kept up to date in your PocketSmith! This means you can set up a filter to delete all transactions within these mortgage accounts, and you will only need to categorise outgoing transactions to track your mortgage.

You can enable Track balance changes for an individual account via the Account Summary (Manage > Account Summary) 'Other settings'.

'Track balance changes' is now enabled! 🙌

So that you only need to manage the expense transactions paid from your main account to your mortgage, it’s important to delete the transactions within the mortgage account. To delete the transactions within your mortgage account, you'll need to create a filter.

To do this:

This means that all transactions within the mortgage account, both those already imported and any future transactions, will be deleted. As such, you will only need to categorise the expense side of your mortgage repayments leaving your bank account 🎉

Now that transactions are no longer imported for the Mortgage account, you will only need to categorise transactions that are leaving your main account 🙌

If you have multiple mortgages, we recommend creating a separate category per mortgage, with each mortgage repayment assigned to its respective category.

For example:

Home loan 1 - Repayments (expense category)

Home loan 2 - Repayments (expense category)

This will make it easier to budget for each individual repayment, as you can set an expense budget for each repayment, matching the amount and frequency for each. This will make viewing these repayments easier on the Budget page, Dashboard, PocketSmith reports, and on the Calendar.

We recommend setting up filters to automatically and accurately categorise these transactions.

For each home loan, create an expense budget reflecting the amount and frequency of your mortgage repayment.

For example, if you have two mortgages with one repayment set to $2000/month  Home loan 1, and a second repayment for $400 on the same dates for Home loan 2 - you would create the following budgets, assigned to the account the payments are made from:

Home loan 1 - (monthly expense budget for $2000)

Home loan 2 - (monthly expense budget for $400)

To forecast the decreasing debt owing for your mortgages, you will need to create two new transfer categories for each mortgage account, with one budget assigned to each.

Using transfer categories for this means you can forecast the decrease in debt on each account, and these budgets will not affect your overall budget summary. This is because budgets set up against a transfer category are excluded from the Budget summary.

First, you will need to create two separate transfer categories - one for the repayment and one for the interest. If you have multiple mortgages, you will need to create two new categories for each of your mortgage accounts. For example:

You will now need to create a budget for each of these transfer categories, as detailed below.

Home Loan 1 Repayment Forecast (transfer category, income budget)

Home Loan 1 Interest Forecast (transfer category, expense budget)

With the budgets set up, your mortgage balance will be forecast to reduce by your repayment amounts less interest, allowing you to see how your mortgage may look in the future!

You can view the forecast for your accounts over on the Calendar. To learn more about using the Calendar and forecast, check out: Using the Calendar and Forecast graph

For the  Home Loan Interest Forecast category, we recommend regularly updating the budget amount using the calendar page and selecting 'This and future budget events' option when applying any changes to more closely match the actual interest charged for your loan. This way, you can ensure your forecast remains up to date and more accurate.