If you are using portion of home for business, that does not technically mean a portion of the mortgage is personal or equity debt. It is all still acquisition debt. But you must now allocate a percentage of the acquisition debt to the business. So if 75% of the home is use for residential living, then 75% of the acquisition debt and interest is used in the calculations on schedule A and 25% is applied to the business. Refer to Pub 587.
