Go Back To Search Results Question Pay off home equity mortgage or continue to use the interest for tax deductable reasons? I have a home equity mortage that i am paying $100/month in interest - $1200 for the year. I am thinking about paying this off, but is that better in the long run? Am I better off using the interest for tax reasons or should i pay off the loan? How much does the interest actually help out? I am in the 25% $33,951 – $82,250 tax brackett, whatever this means. By silvermouse5150 Posted on 08/10/10 Total Answers 5 Answers- Hmmmmm. should I pay $1,000 so I can deduct $250 of it??? Hmmmmmm. Let's seee...... NO! Of course you should pay off the debt. Answer by : Rick B On Date 2010-08-10 18:14:52 I can't see a situation where it would save you money to itemize the interest deduction vs. money saved by eliminating interest. Pay it off. Answer by : Freddy On Date 2010-08-10 18:18:54 Unless you're aware of an investment that guarantees a rate of return higher than than the interest rate you are paying on the mortgage, pay it off. Answer by : David M On Date 2010-08-10 18:27:34 If your tax deduction is the only reason you have this balance, you are really wasting money. For every dollar in interest you pay, you only get 25 cents back as a tax refund. The math doesn't work. Pay it off and be done with it. Answer by : Jay P On Date 2010-08-10 19:39:42 Pay it off. Why? You are paying $1200, just so you can get a $300 break in taxes. Look at it this way: Give me $1200, I will certainly give you back $300. I will do this any time you like. I keep $900, and you keep $300. See? Pay it down faster by paying extra to the principle every month. Answer by : WHAT? On Date 2010-08-10 19:56:47   Go Back To Search Results