What is the mortgage interest deduction?
The mortgage interest deduction is the ability to use the interest paid on the mortgage of your primary or secondary home to reduce your taxable income. Some homebuyers use the tax savings to increase their buying power when buying a new home.
This deduction may reduce your taxable income and taxes owed, depending on how you file, when the mortgage originated, how much you owe and what the money was for.
What qualifies for a mortgage interest deduction?
Interest on purchase mortgages, refinanced mortgages and secondary mortgages may be eligible for a tax deduction. Qualifying for the mortgage interest deduction depends on four major factors: which property the mortgage is on, when the mortgage originated, how much the mortgage is for and how you use the proceeds.
- Primary or secondary residence: Mortgage interest is eligible for a deduction if the mortgage secures your primary or secondary residence. Secondary residences include vacation or seasonal homes that a borrower lives in for part of the year.
- When the mortgage originated: There are different tax rules for deduction limits based on when the mortgage originated.
- Mortgage amount: The maximum mortgage debt you can claim interest on is $750,000, or $1 million for homeowners who incurred home mortgage debt before Dec. 16, 2017.
- How you use the proceeds: You may deduct interest on mortgages originated after Oct. 13, 1987, if the funds were to buy, build or substantially improve your home.
How much interest can you deduct?
The amount of mortgage interest that you can deduct depends on when the mortgage originated:
- On or before Oct. 13, 1987: These mortgages are "grandfathered" in and do not have any debt limitations.
- Through Dec. 15, 2017: You can deduct interest on mortgages used to buy, build or substantially improve your home on up to $1 million in total mortgage debt. Taxpayers who are married but file separately may deduct up to $500,000 in mortgages.
- After Dec. 15, 2017: Mortgages originated after this date used to buy, build or substantially improve your home are capped at $750,000 for interest deductions. Taxpayers who are married and filing separately can only deduct interest on $375,000 in mortgage debt.
For homeowners with mortgages higher than these limits, you must calculate the proportional interest charges to determine how much you can deduct.
How the TCJA affected the mortgage interest deduction
The Tax Cuts and Jobs Act (TCJA) of 2017 lowered the mortgage deduction limit for all new mortgages to $750,000. However, there is an exception for homebuyers who entered into a written, binding contract before Dec. 15, 2017, with a closing date of Jan. 1, 2018, or sooner. As long as you completed the purchase by April 1, 2018, the mortgage interest deduction limit is $1 million instead of $750,000.
With the passing of the TCJA of 2017, the standard deduction nearly doubled, to $12,000 for single filers and $24,000 for joint filers. For the 2025 tax year, these amounts have increased to:
- $31,500 for married couples filing jointly or a qualifying surviving spouse
- $15,750 for those who are single or married filing separately
- $23,625 for head of household
With these higher limits, many homeowners find it easier or more advantageous to use the standard deduction instead of taking the mortgage interest deduction.
How to take the mortgage deduction on your tax return
If you're interested in taking the mortgage interest deduction on your tax return, follow these steps:
- Obtain Form 1098 from your lender. Ensure that it lists the mortgage origination date, ending loan balance and interest paid. This document should also include any points paid on your loan.
- Get the right tax forms. Detail your itemized deductions on Schedule A, including mortgage interest, property taxes, eligible medical and dental expenses, state and local income taxes, and other eligible items.
- Compare standard versus itemized deduction. Compare your Schedule A totals versus the standard deduction. In most cases, your federal income taxes owed will be less if you take whichever is larger.
» MORE: Tax deductions for homeowners
FAQ
How much mortgage interest can I deduct in 2025?
In 2025, most filers can deduct up to $750,000 in mortgage interest. If you’re married filing jointly, you can deduct up to $375,000. These limits were set to expire at the end of 2025, but the One Big Beautiful Bill Act (OBBBA) made them permanent.
What qualifies as a home for a mortgage deduction?
Qualified homes include your primary residence, second home or a home under construction for up to 24 months. Eligible properties include a house, condo, cooperative, mobile home, house trailer, boat or similar property that features sleeping, cooking and toilet facilities. Additionally, taxpayers can include a timeshare as a secondary residence.
What kind of records do I need to take the mortgage deduction?
Lenders send borrowers Form 1098 at the end of each year detailing how much interest they've paid on their mortgages. Many lenders also include these details in the final mortgage statement of each year. Borrowers may also refer to their mortgage closing paperwork that details the origination points they paid when getting their loan.
Why is some mortgage interest not deductible?
Mortgage interest that isn't from loan proceeds used for the purchase or construction of or improvements to a home is considered personal interest and, therefore, not tax deductible. Tax laws want to incentivize homeownership and discourage tapping into your home equity for other purposes.
Additionally, limits on mortgage balances and the number of homes you can claim are intended to minimize the benefits of this deduction for higher-income taxpayers.
Is a mortgage interest deduction worth it?
As a homeowner, you’ll only benefit from the mortgage interest deduction if you itemize your deductions instead of taking the standard deduction. Since the standard deduction was increased under the 2017 law, fewer homeowners itemize, which means not everyone actually sees a tax benefit from mortgage interest.
Whether it’s “worth it” depends on how much mortgage interest you pay, whether your total itemized deductions exceed the standard deduction and your tax bracket.
What else can you write off as a homeowner?
In addition to mortgage interest, homeowners can also deduct state and local real estate taxes, subject to the $10,000 limit.
Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- IRS, "About Form 1098, Mortgage Interest Statement." Accessed Feb. 16, 2026.
- IRS, "Publication 936 (2025), Home Mortgage Interest Deduction." Accessed Feb. 16, 2026.
- IRS, "Topic no. 501, Should I Itemize?" Accessed Feb. 16, 2026.
- IRS, "Credits and deductions for individuals." Accessed Feb. 16, 2026.
- IRS, "Tax benefits for homeowners." Accessed Feb. 16, 2026.
