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@KJM14 wrote:

However, what if they are using proceeds to pay off a line of credit and that line of credit had been used to help buy a different house is that still deductible?

 

Similarly, if they refi rental property to directly fund improvement of their primary residence, is that deductible? That is, the refi proceeds don't have to go into the house that was refinanced.

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Personal mortgage interest is only deductible if it is buy, build or improve your personal residence AND it "is secured by such residence".

That means a mortgage secured against a rental property does not qualify to deduct any personal mortgage interest.

If both houses are personal-use residences, some people may read it as you can mortgage one to buy or improve the other, but I think that most people read it as that it must be secured against THAT home.