Mortgage Points Deduction Calculator

Yes — mortgage points are itemized deductions on Schedule A. Points paid on the PURCHASE of your main home are fully deductible in the year paid (six-test safe harbor under IRS Pub 936). Points on a REFINANCE, second home, or HELOC must be amortized straight-line over the loan's term.

Refinance points are amortized over the loan term. For a 30-year refi with $6,000 in points, you deduct $200/year ($6,000 ÷ 30) for each year the loan is outstanding. Special acceleration rule: if you pay off the loan early (sell, refinance again), the unamortized balance becomes deductible in the payoff year.

Split treatment under IRS Pub 936. The portion of points attributable to substantial home improvements gets the year-1 full deduction (like a purchase). The remainder amortizes over the loan term. Example: $8,000 points on a $400k refi where $200k went to improvements = $4,000 deductible year 1 + $133/year amortized for the remaining $4,000 over 30 years.

IRS Pub 936 lists six conditions all of which must be met to fully deduct purchase points in year 1: (1) loan secured by your main home, (2) paying points is established business practice in your area, (3) points charged are not excessive for your area, (4) cash method of accounting (most individuals), (5) points are not for items typically separately stated (appraisal fees, title), and (6) points are computed as a percentage of the loan and clearly stated on the settlement statement.

HELOC points must be amortized over the loan term — not deductible in year 1. The interest itself (and by extension the related points) is only deductible at all if the HELOC proceeds were used to buy, build, or substantially improve the home securing the loan, per the TCJA home-equity interest rules in effect through 2025 (and likely permanent under OBBBA).

The decision depends on (a) your break-even period — months until interest savings exceed point cost — and (b) how long you'll keep the loan. Plan to be in the home longer than the break-even period for points to pay off, and longer still after factoring in the tax-amortization benefit. For a refinance, the tax amortization plus interest savings means break-even is typically 3-7 years; if you might sell or refinance within that window, paying points usually loses.

Schedule A line 8a (home mortgage interest from Form 1098) for points reported on Form 1098, or line 8c (points not reported on Form 1098) if your closing statement shows them separately. The lender's Form 1098 will report points paid in box 6 if they qualify for year-1 treatment.