There are always ways to borrow money, some more cost-effective than others. But in recent years, only one has remained relatively cheap: home equity. As inflation soared and rates on credit cards and personal loans surged alongside it, home equity loans and home equity lines of credit (HELOCs) remained relatively inexpensive. While not immune from this rising trend, they stayed relatively low thanks to the home in question serving as collateral. And now, with inflation significantly lower than it was and with a cut to the federal funds rate issued in September and another poised to be issued this week, home equity loans are becoming even more affordable for borrowers.

But an interest rate that’s lower than most popular alternatives isn’t the only timely benefit right now. There’s another, arguably equally beneficial feature for borrowers, one that could negate much of the concern surrounding rates on these products. That said, borrowers will need to act promptly to exploit this opportunity. Below, we’ll explain why, specifically, it’s worth opening a home equity loan before the end of 2024.

Start by seeing what home equity loan rate you’re eligible for here.

Why you should open a home equity loan before the end of 2024

There are just under eight weeks left in 2024. Considering that the amount of time it takes to have your home equity disbursed varies by lender (it can take a few weeks or even months), the window of opportunity to utilize your home equity loan this year is closing. Here’s why that matters: If you use a home equity loan for IRS-eligible home repairs and renovations, you’ll be able to deduct the interest paid on the loan when you file your taxes in the spring. 

“Interest on home equity loans and lines of credit are deductible only if the borrowed funds are used to buy, build, or substantially improve the taxpayer’s home that secures the loan,” the IRS tells taxpayers online. “The loan must be secured by the taxpayer’s main home or second home (qualified residence), and meet other requirements.

“Generally, you can deduct the home mortgage interest and points reported to you on Form 1098 on Schedule A (Form 1040), line 8a,” the IRS explains. “However, any interest showing in box 1 of Form 1098 from a home equity loan, or a line of credit or credit card loan secured by the property, is not deductible if the proceeds were not used to buy, build, or substantially improve a qualified home.”

So if you’re planning on using your home for these reasons (a financial advisor or accountant can delve into exactly what qualifies), then you can add a potentially significant deduction into your taxes before filing next April. But if you wait much longer, you may not even get your funds until January. Or, if you get it before then, the amount you utilize this year will do little to alleviate your overall 2024 tax burden. For all of these reasons, then, if you’re planning on completing home projects – and want to use your home equity to do it – it makes sense to open a home equity loan now, before December 31, 2024.

Get started with a home equity loan now.

The bottom line

If you’re looking for an additional tax deduction and are in the process of finalizing financing for some select home projects, it makes sense to take out a home equity loan now, before the end of the year. But a HELOC will also qualify for the same tax benefits, should you prefer the features of a revolving line of credit versus the lump sum the home equity loan offers. Regardless of which option you choose, however, it’s important to act promptly and strategically. And as your home functions as collateral in these unique borrowing scenarios, you should only withdraw as much as you can afford to repay to avoid losing your home.

As President-elect Donald Trump readies to return to the Oval Office, retailers that depend on foreign suppliers are prepared to pass along the cost of his proposed import tariffs to consumers, who can expect to pay more for products, from toys to auto parts. 

Americans stand to lose between $46 billion and $78 billion in spending power each year on products including apparel, toys, furniture, household appliances, footwear and travel goods due to the new tariffs, the National Retail Federation stated in findings released Monday. 

“Retailers rely heavily on imported products and manufacturing components so that they can offer their customers a variety of products at affordable prices,” NRF Vice President of Supply Chain and Customs Policy Jonathan Gold said. “A tariff is a tax paid by the U.S. importer, not a foreign country or the exporter. This tax ultimately comes out of consumers’ pockets through higher prices.”

For example, a $40 toaster oven would retail for $48 to $52 after the tariffs, while a $50 pair of running shoes would jump to to $59 to $64, according to the industry trade group. A $2,000 mattress and box spring set would cost $2,128 to $2,190, the NRF noted.

In his first term, the Trump administration imposed tariffs of up to 25% on more than $360 billion in products from China. President Joe Biden’s White House kept most of those tariffs and added more onto goods including Chinese electric cars and microchips. 

Now, the former president has said he plans to impose a 60% tax on goods from China and a 10% to 20% fee on all of the $3 trillion in foreign goods the United States imports annually.

The broad-based tariffs would reignite inflation, as they’d mostly be paid by U.S. consumers, Treasury Secretary Janet Yellen has warned, offering a general view shared by other economists. 

“A consistent theoretical and empirical finding in economics is that domestic consumers and domestic firms bear the burden of a tariff, not the foreign country,” the nonpartisan Budget Lab at Yale University stated in an analysis published in mid October. 

Trump has repeatedly contended that foreign companies would foot the bill, telling a gathering last month at the Economic Club of Chicago that “the countries will pay” the tariffs, or taxes on imported goods. In reality, American importers pay the tariffs to the U.S. Customs and Border Protection agency when their goods cross the border.

“These policy steps would amount to regressive tax cuts, only partially paid for by regressive tax increases,” and cost a typical middle-income household about $1,700 in increased taxes a year,” according to economists at the Peterson Institute for International Economics. The proposed tariffs would shift tax burdens from the well-off to lower-income Americans, the nonprofit stated in a policy brief published in August.

Harvard professor and former Treasury Secretary Lawrence Summers questioned the wisdom of taxing imports, noting the potential impact on purchasing gifts for children. “For parents, we’re coming up on the holiday season and most of our toys are imported from China,” Summers tweeted on Thanksgiving Day. 

Trump has argued that tariffs compel American companies to make goods on U.S. soil rather than purchasing from foreign suppliers. 

But companies including auto-parts supplier AutoZone have other plans. 

“If we get tariffs, we will pass those tariff costs back to the consumer,” Philip Daniele, CEO of AutoZone, told an earnings call in late September. “We’ll generally raise prices ahead of — we know what the tariffs will be — we generally raise prices ahead of that,” Daniele said. 

Asked how he viewed the impact of inflation and tariffs on his business, Daniele stated that “historically, the industry sees 3%-5% inflation in average ticket and 1%-3% decline in transactions.” 

Major suppliers to AutoZone include companies based in China, India and Germany, the Memphis, Tennessee-based company said in a June press release.

Stanley Black & Decker CEO Donald Allan Jr. last week said his tool-producing company has been planning for the possibility of a “new tariff regime” since the spring. “Obviously, coming out of the gate, there would be price increases associated with tariffs that we [would] put into the market.” 

Allan downplayed the idea of moving manufacturing back to the U.S., saying it would not be cost-effective.

The company’s options could include “moving production and aspects of the supply chain to different parts of the world,” including from China to other parts of Asia and possibly Mexico, the executive said.

Such a shift has already been made by Shelton, Connecticut-based Acme United, which now has its Westcott brand products like rulers made in Thailand and the Philippines, avoiding the tariffs targeting China, CEO Walter Johnsen said in an earnings call.

Acme has also switched production of certain medical products to India, Egypt and U.S. plants in Florida, North Carolina and Washington state, the executive said.

Businesses have also stocked up, placing bigger-than-usual import orders ahead of new tariffs taking hold, as the U.S. imported 11% more Chinese products in July and August than they did during the same two-month period a year ago, according to the Census Bureau.

President-elect Donald Trump’s victory in the November 5 election highlights the frustrations of millions of voters, with many Americans noting in exit polls on Tuesday that they’re still hurting from the highest inflation in 40 years and dissatisfied with the nation’s economic trajectory. 

Trump ran on a campaign that vowed to tackle those issues, pledging to end the “inflation nightmare” and to bring prices down “very quickly.” He also offered a myriad of tax cuts to various groups, ranging from senior citizens to homeowners, as well as to finance some of those cuts through new tariffs on imports from China and other nations and to deport millions of undocumented immigrants.

In the aftermath of Trump’s win, economists and policy experts are assessing how those policies might impact the economy as well as consumers’ wallets. Already, Wall Street is predicting that his policies could boost corporate growth, sending the S&P 500 higher by as much as 2.2% on Wednesday. 

But some experts note Trump’s plans may also boost inflation, potentially hurting consumers who are hoping for relief at the checkout counter.

“The devil will be in the details,” Ed Mills, Washington policy analyst at investment bank Raymond James, told CBS MoneyWatch. “The Trump tax, trade, tariff and immigration agenda could have significant economic impacts and raise concerns about a second wave of inflation.”

However, compromises or alterations to his plans “could mitigate the impact,” Mills added.

To be sure, whether Trump can respond to voters’ most pressing economic issues isn’t certain, especially if the House of Representatives flips to Democratic control, which could stymie his plans to extend tax cuts that were enacted in his 2017 Tax Cuts & Jobs Act (TCJA) as well as to enact other changes.

Here are five ways Trump’s policies could impact the economy and your money. 

Your money under Trump’s tax plans

The core of Trump’s tax plan is to extend the provisions in the TCJA that are set to expire at the end of 2025. These include the law’s lowered tax brackets and expanded standard deduction. 

Trump also wants to provide deeper tax cuts for some individuals and businesses, with his campaign proposing lowering the corporate tax rate to 15% from its current 21%. He’s floated the idea of eliminating personal income taxes on many types of earnings, from tips to Social Security benefits, but has yet to offer details.

Trump’s combination of tariffs and tax cuts, would rank as the sixth-biggest tax cut since 1940, according to a recent Tax Foundation analysis. 

If Trump is able to enact these tax code changes, personal income taxes would decline for all income groups. But the biggest beneficiaries would be high-income households, according to an analysis from the Penn Wharton Budget Model (That research assesses Trump’s proposed tax cuts but doesn’t include the impact of tariffs.)

That means a middle-class family with earnings of about $80,000 a year would get a tax break of about $1,740 in 2026, the analysis found. Top-earning households, with incomes of more than $14 million, would see their taxes reduced by $376,910, according to Penn Wharton.

What could happen with inflation?

Consumers rank inflation as one of their biggest economic concerns, with many still feeling impact of soaring prices during the pandemic. Although the U.S. inflation rate has now fallen close to the Federal Reserve’s 2% annual goal, many Americans still describe it as high because prices haven’t come down; rather, prices are simply rising more slowly than they did during the pandemic.

Economists have cautioned that Trump’s plans could reignite inflation. That’s because tariffs are essentially sales taxes paid by American consumers, rather than the countries that export goods to the U.S. On top of that, Trump’s plan to deport millions of immigrants could also boost inflation as employers would likely face higher wages due to a labor crunch. 

“Two main pillars of his policy proposals, tariffs and mass deportations, are likely to cause prices to rise as they will make it more difficult for businesses to produce goods,” Jacob Channel, chief economist at LendingTree, told CBS MoneyWatch.

Trump’s plan to levy a 10% tariff on all imports and 60% or more on Chinese goods shipped to the U.S. could add $1,700 a year in additional costs for a typical middle-class household, according to the non-partisan Peterson Institute for International Economics. 

Trump’s plans could boost the inflation rate by as much 1 percentage point, bringing it to an annual rate of about 3.4% — above the Fed’s 2% goal — according to Andrzej Skiba of RBC Global Asset Management.

“If you add 1% to next year’s inflation numbers, we should say bye to rate cuts,” Skiba said. 

Could the economy grow faster? 

The economy could initially grow slightly faster under Trump’s plans to cut corporate taxes, but that impact could fade over time, especially due to the impact of deporting millions of immigrants, according to Oxford Economics. 

Real GDP growth could be 0.3 percentage points higher in 2026 than if current economic policies continued, wrote Ryan Sweet, chief U.S. economist at Oxford Economics, in a November 6 research note. 

But, he added, GDP growth could eventually fall to 0.6 percentage points lower in 2028 than earlier projections due to the impact of deportations and higher tariffs. 

Will housing become more affordable? 

Probably not, according to Bright MLS chief economist Lisa Sturtevant. 

First, if Trump’s plans reignite inflation as some economists are forecasting, the Federal Reserve may not continue lowering its benchmark rate. Without further cuts in borrowing costs for consumers and businesses, mortgage rates aren’t likely to fall, she added. 

Second, deporting millions of undocumented immigrants could impact the housing sector — which already faces a severe shortage of homes — because it relies on these workers to build new homes, Sturtevant said. 

“His mass deportation proposal would have a chilling effect on the construction industry, shrinking the already constrained labor force and stalling badly needed new housing construction,” she said. “At the same time, proposed tariffs will increase building costs.”

Will Trump’s policies help your 401(k)? 

Possibly, given that Trump’s proposed corporate tax cuts and support for lighter regulations on businesses, if enacted, could bolster company profits and lift the stock market. 

On Wednesday, indices including the S&P 500 and Dow Jones Industrial Average soared on Wall Street optimism for stronger corporate growth. 

“Lower corporate taxes and/or deregulation of the energy and financial sectors under a Trump administration could provide additional support,” Solita Marcelli, chief investment officer Americas, UBS Global Wealth Management, said in an email. 

Other financial instruments could also get a boost, including cryptocurrencies, due to Trump’s pledge to make the U.S. the “crypto capital of the planet.”

At the same time, much of these forecasts depend on Trump pushing through changes to the tax code, regulations and other laws, Channel noted.

“Virtually all of these policies will be tough to implement, even with Republican control over the House, the Senate and the presidency,” he said. “With that in mind, we might not see much change at all in the broader economy.”

He added, “Inaction from the next Trump administration could mean that the economy continues to chug along its current course.”