Generally, you can deduct all of the interest you pay on a home mortgage, up to $1.1 million, as long as the funds were used to buy, build, or maintain your primary or second home. If you already own a home that you wish to remodel, a home equity line of credit (HELOC) may be used to pay for your remodel. The interest on the HELOC is 100% deductible, as long as the HELOC and primary mortgage together don’t total more than $1.1 million, and the loans were used to buy, build, or maintain the property. Any interest paid on the portion of the loans over $1.1 million is not tax deductible. Beware that if you pay cash for the remodel (or for a home for that matter), you can’t later take out a loan and deduct the interest, since “non-acquisition indebtedness” is not tax deductible.