Is Interest on Home Equity Borrowing Tax-Deductible?
NerdWallet
When you borrow on your home’s equity, there’s a bonus: The interest you pay each year is tax-deductible up to a government-imposed limit, the same as on your home mortgage. The rules for claiming that deduction on home equity borrowing are a little different. The deduction on mortgage interest is dear to Americans and is popularly thought to encourage middle-class homeownership. In fact, the deduction dates to 1913, when few people had mortgages. It was implemented with the adoption of the 16th Amendment to the Constitution, which created a federal income tax. Later, when homeownership became more widespread, the deduction grew in importance for middle-class homeowners.