I paid off my condo with a personal loan, good rate, and now pay interest on that loan. Was I stupid or does this loan count as a mortgage?

[rjs]

A personal loan doesn't count as a mortgage because it's not secured by your condo.

[Carl]

No, the interest is not deductible. In order for the interest to be deductible, the loan must be secured by the home. A personal loan isn't secured by anything. So interest on your personal loan is not deductible.

[Opus 17]

Whether it was stupid or not is a matter of perspective. If you didn’t pay enough interest to itemize your deductions, then the only question is did you get a better interest-rate. Even with itemized deductions, that amounts to a 20% or so subsidy of the interest-rate. So a 5% mortgage would have an effective rate of 4% after the deduction. If you got a better rate on the personal loan, then you’re still ahead.  Having a personal loan instead of a mortgage also means that you don’t have to escrow your property taxes, which might be of some advantage to you.

[Anonymous]

Did your banker know that you were taking out a personal loan to pay off a mortgage?   if so, he/she did you a great disservice.     I'm surprised that you couldn't get a better rate on a mortgage (secured by real estate) than on an unsecured personal loan.     Can you refi the personal loan with a mortgage and thus make the interest deductible? don't think so. for the interest to be qualified residence interest (deductible as mortgage interest) the loan must acquisition debt - debt incurred to acquire, construct or substantially improve your main or second home.  paying off a personal home. paying off a personal loan would not be acquisition debt.