Conventional Loan vs Home Equity Loan

How can you calculate the tax benefits of a home equity loan vs a conventional loan?

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Bill's Answer: Bills.com Resident Expert

Thank you for visiting Bills.com. Here is an answer to your question - which I think I can help you with.

One very nice incentive for home ownership is that mortgage interest is tax deductible. This means the amount that you pay in interest x your marginal tax rate (I generally assume around 40%, but it depends on your tax bracket) is the amount you will save on your taxes.

The tax deductibility is not unlimited, however, so you should check with your CPA or tax advisor.

If the interest paid on a HELOC is more than on a conventional loan, then you are correct that your tax deductibility will be higher... but so will the cost in interest fees. Typically, you will want the loan with the lowest rate, points and fees. For most homeowners, this is achieved by getting a full first mortgage.

Bills.com makes it easy to compare mortgage offers and different loan types. Please visit the loan page and find a loan that meets your needs at

https://www.bills.com/mortage/refinance.

I hope that his helps you make the right decision for your particular situation, but be sure to shop around and find a loan that meets your needs.

If you would like more information, please visit our mortgage resource page.

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