Will my HELOC still be deductible under the new tax reform?

Jan 15, 2018

As any news alert or politically minded Facebook friend will share with you, the U.S. government recently passed legislation to reform tax regulations. This is arguably the biggest overhaul of U.S. tax code in 30 years.

Photo of a house and cash

Regardless of how much money you make it’s important for everyone to know how these new rules could impact their finances. Miscalculating how much you owe on taxes can have a big influence on your financial wellbeing. (Not sure how your taxes will change? Check out this helpful article by the New York Times or this tax calculator from MarketWatch.com.)

As bankers, we’ve been asked if home equity line of credits (or HELOCs) will continue to be tax deductible under the new plan.

Under the new tax plan, the interest you pay on your HELOC will not be tax deductible.

Depending on the amount you pay in interest, this could influence your upcoming taxes. Couple this new rule with the rumors of the Federal Reserve raising interest rates, and it could be a good time to consider wrapping your existing HELOC into a fixed rate mortgage. 

Why should I think about converting my HELOC into a fixed-rate mortgage?

By wrapping your HELOC into a fixed-rate mortgage, you could continue to write off your mortgage interest in the future AND lock in a low rate. Loans subject to credit approval. 

Contact your local loan officer to find out more.