Q. What entries should be made for mortgage and interest only repayments? For info I use GnuCash.

Situation: I have an interest (repayment) only mortgage of, say, £50,000. They added their fees to the loan bringing it to, say, £50,500, and sent me the £50,000.

I have shown £50,000 as...
--- (increase) liability (mortgage) a/c
--- (decrease) assett (bank) a/c

But how should I show their fees of £500?
--- (increase) in liability (mortgage) a/c
--- (decrease) ? (what type of a/c?)

  • Increase Liability and Decrease Asset does not make sense. Accounting equation is Asset = Liability + Equity. You may only Decrease Asset and Decrease Liability, or Credit Asset and Debit Liability.
    – base64
    Commented Aug 14, 2015 at 6:56
  • Perhaps I didn't word it correctly, or perhaps I have done it wrong? My double entry was the liability amount which went into the bank account. It shows ok in my books (ie liability a/c showing amount owed and bank account showing it coming in)
    – itsonlyme
    Commented Aug 14, 2015 at 8:09

2 Answers 2


For the purpose of personal finance, treating $500 as Interest Expense is sufficient.

For business accounting, it involves making the $500 a contra-liability and amortizing it as interest expense over the course of life of the loan.


The £500 are an expense associated with the loan, just like interest. You should have an expense account where you can put such financing expenses (or should create a new one). Again, treat it the same way you'll treat interest charges in future statements.

  • Thank you. I thought it should be an expense account but because it hasn't been paid I just wasn't sure!
    – itsonlyme
    Commented Aug 14, 2015 at 8:07

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