Can I take out a 100% mortgage on a commercial property?

Posted on 1 October 2007

I am in the process of buying a commercial property which I want to rent out. The purchase price is £281,000.

My home is worth nearly £2million and I have no mortgage on this.

I want to take out a 100% mortgage on the purchase of the commercial property. Can I somehow take this out on my home to benefit from a lower interest rate but somehow align it to the commercial property so I can offset the rental income I receive from the tenants against my mortgage payments for tax purposes?

My salary is approx £80,000.

Alex

Hi Alex,

There is no problem in raising whatever mortgage you like on your own property, for 'any legal purpose', this will stop it from being 100% secured against the new purchase, and as you so rightly say, the interest rate will be better.  You could easily take 320,000 on your salary with the equity in your property.

However, I'm sorry to say I cannot give tax advice.   If you can claim tax relief for it somehow, your accountant would be the best person to advise.

Katie.

Categories: Commercial, Remortgaging

 

Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not neccessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.