Mortgage and divorce: Smart options for your situation

Questioner

We are getting divorced and have a house we own now we want to include the loan we have in the mortgage so that the high costs of the interest of this loan go down. And leave the house undivided. Is this a wise decision?

Lawyer

Converting the loan into a mortgage to reduce the interest costs is smart. Note: the interest on that part of the mortgage is only tax deductible in box 1 if the money from that loan was spent on the purchase, maintenance or improvement of the owner-occupied home. Leaving the house (and mortgage) undivided is unwise, because after 2 years the mortgage interest is no longer deductible for the person who no longer lives there and still contributes to the mortgage interest. There may be customized solutions that can be applied.