The Way to Do Your Mortgage in YNAB


Hi. My name is Erin, and I despise my mortgage.

I despise it. It’s my final debt. I have paid off student loans, private loans, charge cards, HELOCs, and vehicle payments. Now I am down to the mortgage. And I need that sucker gone when humanly possible.

that I purchased this home in June of 2019 and obtained a 15-year mortgage I pay bi-weekly.  Luckily, as a result of selling of my previous residence, I had a large down payment.

I thought carrying a 10-year mortgage, however the 15-year mortgage gives me a bit more breathing room if I ever need this, and there was not much difference between the loans, particularly if I am aggressively hitting the equilibrium with additional payments.

Prior to making an offer on the home, I sat down one night and conducted amounts. How fast could I pay off this? I discovered this super useful spreadsheet (I am using the bi-weekly one on this page) which enabled me to figure out that I could probably pay it off in 6 years–and that is what I am aiming for.

In case you are right there with me in wanting to pay off this mortgage and for all, allow me to show you the way I put this up in YNAB to ditch my advancement.

I Set Up My Mortgage as a Tracking Account

I put my mortgage as a monitoring account.  

Before I walk you through the nitty gritty of the way I handle that, I would like you to know, you don’t need to put in a tracking accounts.   The most important thing you can do is funding to the payment and make the payment. That’s the easiest strategy and the only essential component.

For the previous home, I didn’t monitor the mortgage. It was a significant amount and that I understood it was going for some time, so I did not put it up as a monitoring account and simply paid the monthly line item in my budget.

However, for this one, I wish to observe that balance so that I can watch it return. I am attacking this particular debt, and consciousness helps me .

I included a monitoring account with the remainder of my mortgage.  Ensure that you select Tracking > Obligation as the account form.

Set your mortgage for a liability monitoring account

The equilibrium of a monitoring account stays away from the budget. That $150,000 I owe? It has zero effect on the funding, however I can view it from the sidebar on the left and in my net value report.

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It will not influence your financial plan, but you will see it from the sidebar on the leftside.

“Alrighty” you state, “but how can I understand that equilibrium does not impact the funding?”

The item that joins an account into the budget is that the class column.  You are either devoting income as To be budgeted to ship it into the financial institution, or you are categorizing into the class you’ve invested from to eliminate money from the funding.

There is no group column at a monitoring accounts.

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No class column in monitoring accounts.

It is simply not on the budget in any way.

I’ve Two Groups for Your Mortgage within my Budget

I divide them out by my regular monthly mortgage repayment, then I have a class for any extra money to put toward additional payments on my mortgage. When I budget toward the excess mortgage payment class, I enjoy that I am creating a very clear and willful choice.  

1595891042 255 How to Do Your Mortgage in YNAB
I put up two classes in my personal budget.

You do not need to split them out, you can just budget additional to the mortgage class (however I find it is cleaner to do it this way). Since my mortgage is biweekly, you will find just two months a year at which the mortgage payment is significantly greater. I use the principal mortgage category to ensure I am preparing sufficient for the payment that I have to create. I really don’t need to mess that up. 

After a Payment is Made

When I make a payment on my mortgage, then there’s a line item in my budget which shows a categorized move for my mortgage accounts. 

Why classified?  Money is exiting my funding.  Exactly why a move? So it’ll be listed in the mortgage accounts.

Should I create a regular payment, then it looks like this:

How to Do Your Mortgage in YNAB
That is exactly what a normal mortgage payment appears like within my budget.

Notice that the balance on the mortgage accounts has been also upgraded.

It is the exact same procedure if I create an excess payment, I simply select that Extra Mortgage Payments class rather.

1595891042 113 How to Do Your Mortgage in YNAB
That is exactly what an excess mortgage payment appears like within my budget.

Notice again, the account balance was updated.  And when we examine the budget, then we can observe the outflows in these categories.

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Each of the action is recorded within my budget.

How I Account for Mortgage Interest

Thus, we have accounted for payments into the mortgage.  But keep in mind they are charging me interest on this loan. Payments make the equilibrium return, but curiosity makes it move up.

that I must account for this so as to maintain the accounts balance right. I am a very simple woman and want to keep things easy, so after a month I reconcile the mortgage accounts. It will not be appropriate due to the interest, so I simply let YNAB do the math and make an alteration.

Here is what that looks like:

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I make an alteration to repay mortgage attention.

So there you have it! That is the way I do my mortgage in YNAB and no later than December of 2025 it will be gone permanently. 

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