Interest Charge
Record this when your credit-line lender charges interest on your credit account. If your brokerage charges interest on margin debt, use Margin Interest Charge instead.
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 external account — Your lender debits interest from an external 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 |
| External account | External mode | Which account was charged (select or create) |
| Credit-line transfer details | Optional in external mode | Use when the external-account payment was funded from the credit line |
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 external 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 outstanding interest is created on the credit line.
If you paid the charge from personal funds, no other balance changes are needed.
If you funded the external-account payment from your credit line, record the transfer details in this same Interest Charge workflow. The app treats the charge and credit-line funding as one combined event for balance-calculation purposes.
Optional: funded from the credit line
If the lender charged interest to an external account, but you covered that charge by transferring from your credit line, enter the transfer details in this Interest Charge event.
| Field | Description |
|---|---|
| Transfer date | When the credit-line transfer occurred |
| Transfer amount | Amount withdrawn from the credit line |
| Return date | Optional date when any excess was returned |
| Return amount | Optional amount returned to the credit line |
The net transfer increases credit principal. The portion up to the interest charge amount is split using the charge's deductible/non-deductible interest ratio. Any excess beyond the interest charge amount becomes non-deductible principal.
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 external account": immediately — the lender already collected payment.
What about brokerage margin interest? Use Margin Interest Charge. Margin interest is calculated from margin-side balances and is added directly to margin debt, split between deductible and non-deductible portions.
What if this is my first interest charge? The period starts from your first recorded event.
Learn more
- Margin Interest Charge — recording brokerage margin interest
- How interest is time-weighted — the full calculation methodology
- Interest capitalization — capitalizing interest when it was added to the credit balance
- CRA rules applied — cash-basis timing rules