What mortgage expenses are tax deductible?

Mortgage interest on a loan used to buy, build, or substantially improve your primary (or second) home is the largest tax benefit of homeownership. You can deduct interest on up to $750,000 of qualified residence debt ($375,000 if married filing separately). The loan must be secured by the home, and the interest must be paid during the tax year. Interest on additional borrowing beyond those limits is not deductible.

Points – prepaid interest you pay to obtain a lower rate – can be fully deductible in the year you buy your home if:

• The loan is for your primary residence,
• Paying points is an established practice in your area,
• The points are computed as a percentage of the loan,
• The amount appears clearly on your settlement statement, and
• You paid enough cash at closing to cover the points.
  Points on refinanced loans are generally deducted over the life of the loan, not all at once.

Private mortgage insurance (PMI) on conventional loans and mortgage insurance premiums (MIP) on FHA loans have been deductible in past years, but as of 2026 the deduction has expired and has not been renewed. If Congress extends it retroactively, eligible taxpayers with adjusted gross income (AGI) below certain thresholds could again claim this deduction. Check current IRS guidance or consult a tax professional before filing.

Interest on a home equity loan or HELOC is only deductible when the borrowed funds are used to buy, build, or substantially improve the home that secures the loan. Using the loan for other purposes – debt consolidation, college tuition, vacations – makes the interest non‑deductible. The same $750,000 total debt limit applies (all mortgages combined).

Non‑deductible mortgage‑related costs include:

• Property or hazard insurance premiums,
• FHA, VA, or conventional loan guarantee fees (except PMI/MIP when Congress permits),
• Appraisal fees, notary charges, and recording fees,
• HOA dues, utilities, and routine home repairs,
• Late payment penalties and prepayment charges.
  Only items the IRS specifically classifies as mortgage interest or qualified points qualify for the deductions above.

For precise answers to your unique situation, ask our AI agent. It is grounded in an always‑current knowledge‑base of IRS publications and tax guidelines – no guessing, just accurate information from your own trusted source.

Can I deduct mortgage interest from my taxes?

Yes, if the loan is secured by your primary or second home and used to buy, build, or substantially improve it, within the $750,000 debt limit. Interest on a vacation home also qualifies as long as you do not rent it out extensively, and you itemize deductions on Schedule A.

What is the mortgage interest deduction limit?

For mortgages taken out after December 15, 2017, you can deduct interest on up to $750,000 of home acquisition debt ($375,000 for married filing separately). Older loans (pre‑December 16, 2017) still follow the previous $1 million limit. Home equity debt counts toward this total only when used for home improvements.

Are points paid on a mortgage tax deductible?

Points are fully deductible in the year paid if they meet IRS requirements: the loan is for your primary home, paying points is customary in your area, they are a percentage of the loan, shown on the settlement statement, and you provided enough cash at closing. Points on a refinance must generally be amortized over the loan term.