Interest Charge
Record this when your lender charges interest on your credit account.
Charging mode
Choose how your lender bills interest:
Added to credit balance — Your lender adds interest directly to your HELOC balance. This creates outstanding interest that must be paid later via Credit Payment or Interest Capitalization. This is the default.
Charged to linked account — Your lender debits interest from a linked account (e.g. chequing). No outstanding interest is created on the credit line. The deductible portion is counted as paid immediately.
What you enter
| Field | Required | Description |
|---|---|---|
| Date | Yes | Date the interest was charged |
| Amount | Yes | Total interest charged |
| Linked account | External mode | Which account was charged (select or create) |
What happens
Added to credit balance
The app calculates how much of the charge is deductible using a time-weighted split based on your balance composition during the billing period:
- Outstanding Eligible Interest increases by the deductible portion
- Outstanding Non-Eligible Interest increases by the non-deductible portion
The interest is not yet deductible — it becomes deductible when you pay it (via Credit Payment or Interest Capitalization).
Charged to linked account
The same time-weighted split is calculated. The interest is immediately marked as paid — the deductible portion counts toward your tax year deductions. No credit balance changes.
If you funded this payment from your HELOC (rather than personal funds), record an Interest Capitalization event linked to this charge.
Click the event in your ledger to see the full interval breakdown showing how the split was calculated.
Common questions
How is the deductible portion calculated? The app divides the billing period into intervals based on balance-change events, then weights each interval by its balance and duration (the average daily balance method). The detail view shows every interval. The calculation is identical regardless of mode.
When does interest become deductible for tax purposes? For "Added to credit balance": when paid, not when charged. For "Charged to linked account": immediately — the lender already collected payment.
What if this is my first interest charge? The period starts from your first recorded event.
Learn more
- How interest is time-weighted — the full calculation methodology
- Interest capitalization — capitalizing interest for both lender types
- CRA rules applied — cash-basis timing rules