Mortgage Interest Deduction
An itemized deduction for interest paid on mortgage debt up to $750,000 ($375,000 if married filing separately) used to buy, build, or improve your primary or second home.
The mortgage interest deduction lets homeowners deduct interest paid on qualified home mortgage debt as an itemized deduction. For mortgages taken out after December 15, 2017, the deduction applies to debt up to $750,000 ($375,000 for married filing separately). Mortgages originated before that date are grandfathered at the old $1 million limit.
The deduction covers interest on loans used to buy, build, or substantially improve a qualified home, which can be your primary residence or a second home. Home equity loan interest is deductible only if the funds were used to buy, build, or improve the home securing the loan.
Your mortgage lender sends you Form 1098 each January showing the interest you paid during the prior year. This deduction is one of the largest itemized deductions for many homeowners, but with the higher standard deduction, many taxpayers — especially those with smaller mortgages — find that the standard deduction exceeds their total itemized deductions.
Related Terms
Itemized Deduction
Specific expenses you can deduct instead of taking the standard deduction, including mortgage interest, state/local taxes (up to $10,000), charitable donations, and medical expenses.
Standard Deduction
A fixed dollar amount that reduces your taxable income, available to all filers who do not itemize. For 2025, it is $15,000 for single filers and $30,000 for married filing jointly.
SALT Deduction
An itemized deduction for state and local taxes paid, including income tax (or sales tax) and property tax. Currently capped at $10,000 per return ($5,000 for married filing separately).
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