What will my tax savings be?
This tool shows the maximum tax savings you may be able to take advantage of on a home equity loan and a home equity line of credit. It is assumed that the interest expense for both loans can be deducted from your income for income tax-reporting purposes.
Since no loan principal is repaid during the borrowing period on the line of credit, it 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. In case the interest rate is variable, the calculator allows you to enter a forecast.