Mortgage Payments and Interest

Accounting
1

Hi there,

Just signed up for QuickFile so very much learning things.

Can someone advise please how I record Mortgage Repayments and successfully split out the Interest element from the Repayment element if only one figure is taken from my bank account, please?

Ideally in a way that will make sense when exported for an accountant at year end, thank you.

Darryl

2

Hello @isleoinvestments

Yoiu may find this poste useful

3

Thanks for the quick response. I’ve taken a look at that and it’s probably a little above my head.

Is that saying set up a loan account to represent the mortgage? If so, how do I then represent repayments versus interest, please?

4

Hello @isleoinvestments

The article describes the mortgage showing as a loan account in the banking screen

lets say you are paying 1200 per month (1000 capital and 200 interest)

You can do it a few ways

  1. Record 2 money out transactions on your bank (1000 and 200) tagged as
  • 1000 transfer to a bank (the loan account)
  • 200 tagged to interest nominal code
  1. Record 1 money out transactions on your bank 1200 as transfer to loan account, then on the loan account record a money out transaction (200) tag it to interest nominal code

Either way the balance would decrease on the loan account as you pay the mortgage off and the interest is recorded separately on the interest nominal code

5

Great, thank you - do I raise the purchase as a normal purchase item, and ‘pay’ for it with the loan account?

6

If you mean the interest payments then no. Interest isn’t a “purchase”, you would just tag the money out transaction for the interest as “something not on the list” and choose the appropriate overheads nominal code.

7

Sorry, no I meant the property purchase itself that’s associated with the mortgage/loan?

8

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