Mortgage loan

Can anyone outline how this actually works? - the online library info is sparse and vague.

I've seen some posts saying that the way it calculates interest doesn't work for all types of mortgage - so how does it calculate interest?

Can you exclude mortgage loans from your net worth?

Any other pitfalls or issues people have come up against?

Many thanks :-)

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  • Hi there! Amortized interest is added each month after a payment is made - since there are differences in when banks apply interest, there can be some differences from month to month, but over the course of a year, the calculations are pretty darn close for most mortgages. 

    You can exclude any account from your net worth by clicking on All Accounts at the top of the reports screen, and then de-selecting the accounts you'd like to exclude.

    My learning curve with the tracking accounts is to reconcile less often (quarterly-ish is generally what I do with tracking accounts, and I think I'll do the same with loans) and use it more as a tool to help me see how much extra payments will affect the interest I pay. 

  • Just read the email regarding the new loan account features with changing payment amount or 1 time payment. I see how it could be a game changer for people to see how small changes (increase in payment amount) can affect the term of the loan. Will YNAB offer the flexibility of changing a loan account (mortgage) to bi-weekly or weekly payment schedule?

    • Sea Green Screwdiver Our design team is all ears on what YNABers would like to see and what works best with this feature. Will you send your ideas over via a Feature Request?

  • Hi Marisa. Thanks for the link to Feature Request. I have submitted the idea.

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  • When I had a mortgage, I excluded it from net worth by keeping it Off budget. I had an on budget category for it but transferred payments to the Off budget account.  I checked for interest added via the bank account and added it manually to the off budget account

  • Just adding to this thread since it exists - I suggested via the Feature Request that a "value" be assignable to an asset for net worth tracking.  Today, I moved to the "Loans" feature to try it out, and lost most of my net worth tracking ability as now it just looks like I'm in debt up to my eyeballs, instead of having a significant amount of wealth tied up in the equity on the two properties the mortgages secure.

    Technically I have equity in a couple cars, but I can totally see not encouraging that as a source of wealth since they generally depreciate.

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