How to model property and mortgages

Summary

• Adding a property and mortgage on its own doesn't change your wealth chart or cashflow — property value and equity are excluded unless the property is sold.
• For a rental, set the property to "Rental": the mortgage payment is deducted from the rent shown on the same card, and Section 24 relief is calculated from the mortgage interest automatically.
• Property equity does feed into your estate figure on the IHT tool, separately from the main projection.

Steps

1. Open the Property tab to add your home or other properties.

2. Enter the current value, any outstanding mortgage balance, interest rate, and remaining term.

3. By itself, this doesn't do much to your main projection. Property value and equity are excluded from the retirement cashflow and wealth chart unless the property is sold (see selling a property) — the Property tab's own mortgage calculator is for exploring rate changes, overpayments, and payoff timing in isolation, not for feeding equity into your net worth over time.

4. If the property is a rental, set What is this property? to Rental — this is what actually connects the mortgage to your projection. Rent, expense ratio, and dates appear right on the card; the mortgage payment gets deducted from that rent in your cashflow, and Section 24 relief is calculated from the mortgage interest automatically. Jointly owned? Tick Jointly owned on the same card to split the rent automatically between you and a partner — see rental income for details.

5. For inheritance planning, use this alongside the IHT tool — property equity does feed into your estate figure there, separately from the main cashflow/wealth projection.

Repayment vs interest-only

• Repayment — your monthly payment is fixed for the whole term, split between interest and principal. Early on, most of it is interest; as the balance shrinks, more goes toward principal each month, until the balance reaches £0 exactly at the end of the term.
• Interest-only — your monthly payment is interest only, calculated on the full original balance, which doesn't reduce on its own. A monthly overpayment, if you add one, still reduces the balance directly, on top of the interest.
• For an interest-only mortgage, see rental income for what happens once the term ends — by default the cost is assumed to continue (rolled over or remortgaged), or you can tick a box to model it being repaid in full instead.

Example scenarios

"I added my home with a mortgage — why hasn't my wealth chart changed?"

Check the wealth projection and cashflow chart after entering a property with a mortgage balance — they'll stay the same. Property value and equity are excluded from the retirement cashflow and wealth chart unless the property is sold. The Property tab's mortgage calculator is for exploring rate changes, overpayments, and payoff timing in isolation, not for feeding equity into your projection.

"I have a buy-to-let with a mortgage — how do I see it in my projection?"

Set the property's type to Rental. The mortgage payment is then deducted from the rent shown on the same card, and Section 24 relief is calculated from the mortgage interest — this is what actually connects the mortgage to your projection.

Frequently asked questions

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