What Will My Tax Savings Be With A Home Equity Loan or Line of Credit

See the mortgage interest tax savings on a home equity loan and line of credit. Since no loan principal is repaid during the borrowing period, the line of credit generates more interest expense and, thus, larger tax savings. As a result, the effective borrowing cost for a home equity line of credit is lower than for a home equity loan. The home equity loan has regular amortization of loan principal, which is not tax-deductible.


What Will My Tax Savings Be With A Home Equity Loan or Line of Credit?

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* For HELOCs, "Months to Pay" refers to the months of interest-only payments during the initial draw period. For Home Equity Loans, it refers to the total months to pay off the loan.

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