What is deductible
IRS Topic 505 defines qualified mortgage interest as interest and points you pay on a loan secured by your main home or a second home. Publication 936 sorts the debt into three categories, and the category sets the limit:
| Debt | Limit on the debt whose interest is deductible |
|---|---|
| Mortgages taken out on or before October 13, 1987 (grandfathered debt) | no limit |
| Home acquisition debt from October 14, 1987 to December 15, 2017 | $1,000,000 ($500,000 married filing separately), including grandfathered debt |
| Home acquisition debt after December 15, 2017 | $750,000 ($375,000 married filing separately), including the earlier categories |
Home acquisition debt means a mortgage used to buy, build or substantially improve the home that secures it. The limits apply to the combined mortgages on your main home and one second home. Above the limit, only the proportionate share of the interest is deductible: on a $900,000 post-2017 mortgage, $750,000 ÷ $900,000 of the interest, about 83 percent, counts.
Home equity loans, points, insurance
- Home equity loans and lines of credit. Publication 936 is categorical: no matter when the debt was incurred, you cannot deduct the interest on a loan secured by your home to the extent the proceeds were not used to buy, build or substantially improve the home. A HELOC that funds a renovation qualifies, within the overall limit; one that consolidates other debt does not.
- Points. Points paid on a loan secured by your home are qualified mortgage interest, generally deducted over the life of the loan, with an exception for points on a principal residence covered in Topic 504; the guide mortgage points works out whether buying them pays before tax.
- Mortgage insurance premiums. For 2025 returns Publication 936 says the deduction has expired. For 2026, Publication 505 says the election to deduct qualified mortgage insurance premiums, under a contract issued after December 31, 2006 on home acquisition debt, has been made permanent; what is PMI covers the premium itself.
- Form 1098. The lender reports interest of $600 or more on a mortgage, with points and mortgage insurance premiums, on Form 1098; that is the figure for Schedule A.
What it is actually worth
The deduction is an itemized deduction, so it only helps to the extent your itemized total exceeds the standard deduction, $32,200 on a 2026 joint return and $16,100 single, as standard deduction 2026 explains. A couple with a $400,000 mortgage at 6.5% over 30 years, $10,000 of state and local taxes under the SALT cap and no other itemized deductions:
| Item, first full year | Amount |
|---|---|
| Monthly payment | $2,528 |
| Mortgage interest in year 1 | $25,868 |
| State and local taxes | $10,000 |
| Itemized deductions | $35,868 |
| Standard deduction, married filing jointly | $32,200 |
| Extra deduction from itemizing | $3,668 |
| Federal tax saved at 22% | $807 |
| Saving as a share of the interest paid | 14.2% |
The interest falls each year as the balance declines, from $25,868 in year 1 to $24,545 in year 5 on this loan, so the itemizing advantage narrows every year. The mortgage calculator gives the interest for every year of any loan, and the refinance calculator shows how a lower rate changes it, which usually matters more than the deduction.
| Year | Interest paid | Itemized total with $10,000 SALT | Over the $32,200 standard deduction |
|---|---|---|---|
| 1 | $25,868 | $35,868 | $3,668 |
| 2 | $25,569 | $35,569 | $3,369 |
| 3 | $25,249 | $35,249 | $3,049 |
| 4 | $24,909 | $34,909 | $2,709 |
| 5 | $24,545 | $34,545 | $2,345 |
This guide follows IRS Publication 936, Topic 505 and Publication 505 for 2026. Rental property interest follows different rules on Schedule E, and state income tax treatment of mortgage interest varies.
Frequently asked questions
How much mortgage interest can I deduct?
Interest on up to $750,000 of home acquisition debt, $375,000 if married filing separately, for mortgages taken out after December 15, 2017, per IRS Publication 936; the limit is $1 million ($500,000) for debt taken out between October 13, 1987 and December 15, 2017, and mortgages from before October 14, 1987 are not limited. The limits apply to the combined debt on your main home and one second home, and the deduction is only available if you itemize.
Is mortgage interest still worth deducting?
Only to the extent your itemized deductions beat the standard deduction, which for 2026 is $32,200 on a joint return and $16,100 single. A couple with $25,800 of first-year interest on a $400,000 loan and $10,000 of state and local taxes has $35,800 of itemized deductions, $3,600 more than the standard deduction, so the mortgage interest saves tax on $3,600, not on $25,800. The benefit shrinks every year as the interest share of the payment falls.
Can I deduct interest on a home equity loan or HELOC?
Only if the money was used to buy, build or substantially improve the home that secures the loan. Publication 936 states that no matter when the debt was incurred, interest on a loan secured by your home is not deductible to the extent the proceeds were not used for those purposes; a home equity loan that paid off credit cards or a car does not qualify, and one that paid for a kitchen does, within the overall limit.
Are mortgage insurance premiums deductible in 2026?
Publication 505 for 2026 says that beginning in 2026 the election to deduct qualified mortgage insurance premiums, paid under a contract issued after December 31, 2006 in connection with home acquisition debt on a first or second home, has been made permanent. Publication 936 for 2025 returns still shows the deduction as expired, so 2025 and 2026 differ on this point.
Does a second home count?
Yes, one second home. IRS Topic 505 says a second home can be any other residence you own and choose to treat as one; if you rent it out, you must also use it personally for more than the greater of 14 days or 10 percent of the days it is rented. The debt limits are shared across both homes, not doubled.
Sources
- IRS Publication 936, Home Mortgage Interest Deduction (2025 returns) (the $750,000 and $375,000 limits for debt after December 15, 2017; $1 million and $500,000 for earlier debt; grandfathered debt before October 14, 1987; home equity loan interest only when used to buy, build or substantially improve; points; Form 1098; the mortgage insurance premium deduction expired for 2025)
- IRS Topic no. 505, Interest expense (qualified mortgage interest and points on a loan secured by a main or second home; the second home and the 14 days or 10 percent rule; Form 1098)
- IRS Publication 505 (2026), Tax Withholding and Estimated Tax (beginning in 2026 the election to deduct qualified mortgage insurance premiums is made permanent)
- IRS Rev. Proc. 2025-32, section 4.14 (the 2026 standard deduction of $32,200 joint and $16,100 single)
General information based on the sources above, not tax, legal or financial advice.