The Home Mortgage Interest Deduction

In most cases, you can deduct all of the interest you pay on any loan that is secured by your home, whether the loan is called a mortgage, a second (or third, fourth, fifth, etc.) mortgage, a home equity loan, a line of credit, or a home improvement loan. Your lender will mail you an end-of-year statement that breaks down your house payment into components, and tells you exactly how much interest you paid. You can't deduct the portion of the payment that goes toward repaying the principal amount of the loan.