Question by Tom B: Can interest for a Home Equity Installment Loan be deducted the same as a standard mortgage?
I can refinance with minimal closing costs compared to traditional refinancing with a mortgage if I use a home equity installment loan (HEIL). Before doing so, I want to verify that this will be treated the same as a mortgage in US federal income tax.
Answer by BittenApple
Assuming that this loan is being used for the home, either to refinance the old note or to make home improvements, then yes. There are restrictions, but mainly they are for large, expensive homes.
But if you are using the money to pay off some personal debt, like credit cards, then the interest is not deductible.
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