I am buying a rental house in ocean city, MD. My primary home is PA. I do not know whether it is better for me to take mortgage on my primary house or part time rental house? Which give me more tax benefit? Will my interest rate be better with one option over the other?

  • Do you already have a mortgage on your primary home?
    – Nick2253
    Commented Feb 3, 2015 at 21:25

1 Answer 1


The interest rate will probably be better for your primary residency, however the risk is higher too. In the event you can't pay it off - you probably would rather lose the second home and not the primary home.

Re the tax benefit - it will be attached to the rental you're buying, since that's what the loan is for. However, if you have a HELOC on your primary residency, you can deduct interest on up to $100K on your Schedule A regardless of what you're doing with the money. This can be useful if the rental is losing money and you don't want to accumulate the interest deduction as passive loss.

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