HELOC Interest Deduction Calculator
Under TCJA rules — made permanent by OBBBA — HELOC interest is only deductible if the funds are used to buy, build, or substantially improve your home. Calculate your deduction.
This calculator covers the tax-deductibility question only. For your actual monthly payment — including the interest-only draw period and the payment shock once repayment begins — see the HELOC Payment Calculator.
Deductible HELOC Interest
$4,500Total Itemized Deductions
$34,000Standard Deduction
$32,200Recommendation
Itemize
Itemized is $1,800 above standard
Estimated Tax Benefit
$396
From mortgage + HELOC interest deduction
HELOC interest deduction FAQs
Is HELOC interest deductible when used for debt consolidation?
Generally no. Interest is not qualified home mortgage interest merely because the HELOC is secured by a home. The proceeds must be used to buy, build, or substantially improve the qualified home securing the debt.
What counts as substantially improving a home?
An improvement generally adds value, prolongs useful life, or adapts the home to a new use. Routine repairs and maintenance usually do not qualify unless they are part of a larger qualifying improvement project.
Do I have to itemize to deduct HELOC interest?
Yes. Qualified HELOC interest is claimed as home mortgage interest on Schedule A. It produces a federal benefit only when allowable itemized deductions exceed the standard deduction or otherwise change taxable income.
Does the mortgage debt limit include the first mortgage and HELOC?
Yes. The acquisition-debt limit applies to the combined qualifying debt secured by the main home and a second home, subject to grandfathered-debt rules. The deductible-interest fraction can be limited when combined balances exceed the applicable cap.
Sources
Related Calculators
HELOC Payment Calculator
Interest-only draw-period payment vs fully-amortizing repayment, plus payment shock
Mortgage Interest Deduction
$1M loan cap ($500k MFS), $40,000 SALT cap, Schedule A itemized
Mortgage Points Deduction
Purchase = year-1 full; refi = amortize over term; refi-with-improvements = split (Pub 936)
Itemized vs Standard
$40,000 SALT cap, mortgage interest, 7.5% AGI medical floor