Commerical vs residential mortgages - amongst other things!

columbo360

Good afternoon,

My wife (sole trader) owns a dance studio which is in the adjoining building to our home. Both properties are under seperate titles, with us both on the title to the house, and only only her down on the title to the studio.

We currently have a mortgage on the house and no mortgage on the studio.

My question is:
Is there a better alternative to this current arrangement? i.e. would it be more cost effective to switch the mortgage to the studio? Or set up a company? Or a combination of mortgages on both?

Many thanks for you help.

zygurat789

The answer is probably, it depends on other factors such as the profit the studio makes, your wife's income and the equity she has in the studio.
It would be good to have a mortgage on the studio, the interest on which would reduced your wife's taxable income and there would be a corresponding reduction in the mortgage on your housde.