Mortgage Correlation to Net Worth

[Derek Taylor]

​Greetings! I'm a beginner investor and am confused about how mortgages correlate to net worth. If I buy an asset for $200,000 with 20% down, I'm financing $160,000 (aka, the mortgage). My asset is obviously 200k, but do I list my liability as 160k even though that number doesn't include the interest? With 4% interest, my 30 year fixed 160k mortgage is actually a 275k liability. Does this mean I'm negative 75k in the red even with my 20% equity? This doesn't seem practical. Are mortgage liabilities only shown as the principle then so that the asset is above water? Thank you kindly for your wisdom!