How to track a mortgage or loan in a budgeting app
Add a loan or mortgage account in Money by Zaweba with its opening balance. Payments go in as transfers and the debt counts against net worth.
In Money by Zaweba you track a mortgage or loan by adding it as its own account. Choose the loan or mortgage account type, give it the amount you owe as the opening balance and the date that balance applies, and Money counts it against your net worth. Your monthly payments then go in as transfers from the current account, so the balance owed falls as you pay.
Many budgeting tools only look at money going in and out of the current account. That shows the payment but not the debt, which is half the picture. A loan account gives you both.
Before you add the account
Have your latest mortgage or loan statement to hand. You'll want the balance outstanding on a particular date. If you plan to import your bank statements from a certain point, use a balance from about that date, so the payments you import afterwards line up.
Setting up the account
Use New account on the File menu. Pick the loan or mortgage type, give it a name you'll recognise, such as Mortgage or Car loan, and enter the opening balance and opening date. The currency is pounds by default. The new account appears on the Accounts page on the left, alongside your current account, savings and cards.
An account's balance on any date is its opening balance plus every transaction up to that date, and nothing at all before the opening date. So the loan only starts counting from the day you choose.
Recording the payments
Each monthly payment leaves your current account and reduces what you owe. Record it as a transfer: in the current account's register, press Ctrl+T, enter the payment as money out and choose the Transfer entry for the loan account in the category list. Money makes a linked pair, one row in each account. Because it's a transfer, it isn't counted as spending, which is right, since the money has gone to reduce a debt that's already on your books.
To save typing, set the payment up as a regular transfer under Plan, then Bills and deposits. Pick monthly, and it appears in the panel of bills due in the next 30 days, where you can enter it, change the amount if it differs, or skip it.
Keeping the balance right
Your lender's statement is the authority on what you owe, because it includes interest and any charges. Money doesn't calculate interest for you, so from time to time compare the loan account's balance with the lender's figure. When they differ, the reconcile wizard is the tidy way to bring them together. Start Reconcile an account, enter the statement date and closing balance, tick off the payments that appear on the statement, and if a gap remains because of interest, finish with a Balance adjustment entry.
Some people prefer to record interest as its own transaction each time the statement arrives, filed under a suitable category under Financial. Either approach keeps the account matching reality.
Seeing it in your net worth
The Net worth report on the Reports page (Ctrl+R) builds its line from every account balance, so a mortgage counts against the total and you can watch it shrink over the years. The Home dashboard shows the same in brief. If you also own the property, you can hold it as an investment account and value it by hand with Update value, so net worth shows the home as well as the loan, as the sample file does.
A few things to avoid
Don't file mortgage payments as ordinary spending as well as tracking the loan, or they'll be counted twice in your reports. Don't set the opening date after payments you've already imported, or those payments will push the balance out. And keep the lender's paperwork; Money mirrors the debt, but the lender's statement is the record that counts.
