Tax-Deductible Interest

Loan interest qualifying as interest deductible from federal income taxes. Mortgage interest payments on first and second homes are fully deductible, but mortgage interest on a third home, if for personal use, is treated as nondeductible Consumer Interest. Interest on a home equity loan-Home Equity Credit-is tax deductible if used primarily for home improvements, medical expenses, or education. Interest payments on credit cards, auto loans, and other types of consumer interest is regarded as consumer interest; the tax deduction for such interest ended in 1991.