Mortgages
Long-Term LiabilitiesThis code records amounts relating to mortgages, expected to be settled over a longer period, typically more than 12 months. As a liability account, it normally carries a credit balance: credit entries increase the balance (recording new amounts owed) and debit entries decrease it (recording payments made).
Real-world examples
Owner-occupied trading premises
A business buys the freehold of its workshop or offices rather than renting, taking out a commercial mortgage of £180,000. On completion, the entry is a debit of £180,000 to a fixed asset code for the property and a credit of £180,000 to 2330 (Mortgages). No VAT applies — the sale of land and buildings is normally VAT-exempt unless the seller has opted to tax it. Monthly repayments then split between reducing 2330 (capital) and a finance costs code (interest).
Property investment company
A separate property company set up purely to hold a building and let it out — to a group trading company or to external tenants — mortgages the property to fund the purchase. The mortgage entry itself is identical to the owner-occupier example, but the income side differs: rent received is credited to a rent income code (4904) rather than offsetting overheads, and if the landlord has opted to tax the property, VAT must be charged on the rent and can then be reclaimed on mortgage-related costs. Aside from that VAT distinction, mortgages don't vary much by industry — the accounting is the same whatever the building is used for.
Commonly confused with
Because code 2310 (Hire Purchase) sits right next to this one in Long-Term Liabilities, it's a common mis-posting target. Code 2330 is specifically for mortgages, while 2310 covers hire purchase — similar in nature, but keeping them separate is what makes the long-term liabilities section of your management accounts meaningful rather than a single lumped total.
What a mis-posting here costs you
An error posting to Mortgages misstates what the business owes, and for a Current Liabilities code specifically it can distort the working capital and current ratio that lenders and suppliers look at when assessing short-term financial health.