Mortgage Interest - HELOC

Forum|Forum|2 months ago
April 13, 2026
1 reply
18 views

In 2025, I refinanced a HELOC. I needed a larger limit so they replaced the first with a new one. On the new HELOC, when they ask the 3 questions, which do I check off - "This loan is a HELOC", or "This loan is a refinancing of a prior loan"?

Vanessa A

Level 15

If it does not allow you to check both, then just check the HELOC since it is still a HELOC.

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martin3Author

Level 2

Ok thanks. I did that. The system then asked me an additional series of questions about the loan balances at the end, and on Jane 1, 2026. I believe it was trying to sequence them. I'm not sure I answer those correctly. How do I get back to that cycle of q&a to double check?

Mike9241

Level 15

Interest on the original and any subsequent refinancings of HELOC is only deductible if it was used to make substantial improvements to the residence. The property must secure it. If you refinance for more than the balance at that time, and interest on the previous HELOC was deductible, only interest on the portion refinanced is deductible unless the excess was used to substantially improve the property. In addition, there is a cap on how much debt can count as qualifying residential interest

so i think because of the refinancing rules, that's the question that must be answered. It's up to you to determine if it was used to substantially improve the property and the secured by property issue. if either or both are not true none of the interes is deductible and qualified residence intertest

Mike9241