Do you even understand what a "loophole" is? You throw around the term but really have no idea what it means. Loopholes, by definition, are *unintended* technicalities in the law that people exploit to their advantage. The key word is *unintended*. The mortgage interest deduction in the tax code was very much intended to be used the way it is, to incentivize home ownership. That's why it CAN'T be a loophole, because it's being used exactly as it was intended. A loophole would be for example, deducting interest on borrowed money to buy a car (interest on personal car loans isn't deductible), where you take out a HELOC (instead of a car loan), and use the money to purchase a Mercedes or something - then deduct the HELOC interest. It's legal to do so, but is contrary to the intent of a HELOC.