Are home equity loans tax-deductible?

Advertisement — in-article

Sometimes. Under current U.S. rules, interest on a home equity loan or HELOC is generally deductible only when the money is used to buy, build or substantially improve the home that secures the loan — and only if you itemize. Use the funds for a renovation and the interest may qualify; use them to pay off credit cards or buy a car and it usually won't.

Limits

The deduction falls under the overall mortgage-interest cap (interest on up to $750,000 of combined home-acquisition debt for most borrowers). Rules change and depend on your situation — confirm with a tax professional. Nothing here is tax advice.

Estimate your equity →