Should You Use a HELOC or HEL to Purchase a Vehicle?

Current Local Mortgage Rates

Here is a table listing current conforming mortgage rates in your area, which you can use to compare against other loan options.


Using a Home Equity Loan to Buy a Car

Home equity loans generally often have lower interest rates than auto loans since homes tend to appreciate while vehicles typically depreciate. In some cases auto manufactures offer special rates on new vehicle models to move slow selling new cars, though people with lower credit scores may not qualify for those incentives. People with bad credit who are buying used vehicles may often get charged 10% APR or more for auto loans.

In the past interest on home equity debt was tax deductible, but it no longer is unless it is obtained to build or substantially improve the homeowner's dwelling. The Tax Cuts and Jobs Act of 2017 changed what home debt interest payments could be deductible against income. As of 2018 homeowners can deduct interest paid on first mortgages, up to a limit of the interest payments on the first $750,000 of debt.

This calculator was created before the new tax bill passed, so please leave the state & federal tax rates at 0% to get accurate calculations. We considered removing the income tax deduction features from the calculator, but kept the feature as the tax laws may change again in 2025. Accurate calculations require leaving these fields set to zero if the debt is taken on for reasons other than building or improving the dwelling, since you can no longer deduct equity debt obtained for other purposes. If the interest deduction is important to your finances then a cash out refi on your original mortgage may still qualify (or at least the portion of the debt which is considered origination debt or debt which is used to build or substantially improve the dwelling).

For your convenience a tab above lists current local interest rates. You can use these rates to estimate the price of various mortgage loan products.

Withdrawing Home Equity.