No, it is not fully deductible. Only the portion that was used to buy, build or substantially improve the home that secures the loan is deductible. So if your second mortgage balance is now $100,000 and you used $33,000 to pay off your primary home, only the interest on the $67,000 is deductible. The interest on the $33,000 would not be deductible since it was used for something other than the second home.
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