The new tax law limited the amount of mortgage interest that can be deducted for loans over $750,000 (previously up to $1,000,000 was allowed) and disallowed the deductibility of interest on home equity loans not used for the purpose of “debt incurred in acquiring, constructing, or substantially improving any qualified residence of the taxpayer.”
The important takeaway is that interest on Home Equity Loans and Home Equity Lines of Credit (HELOC) may still be deductible if the proceeds are used for home improvements, but can no longer be used to consolidate other debts such as student loans, credit cards, or auto loans.
For a full explanation, please see: Deducting Interest on Home Equity Debt Under the New Tax Law