What is a Mortgage Payable?

A mortgage payable is the liability of a property owner to pay a loan that is secured by the property. From the perspective of the borrower, the remaining principal balance on the mortgage that is not to be paid off within the next 12 months is classified as a long-term liability. Most of a mortgage is classified in this manner, since most mortgages have terms of up to 30 years, and so will not be paid off for an extended period of time.

Any portion of the debt that is payable within the next 12 months is classified as a short-term liability. This separate treatment is needed for liquidity analysis purposes, to see if the mortgage holder has sufficient current assets to pay for all current liabilities.