Quick Answer
Quick Answer: Yes, mortgage interest is still tax deductible in 2026 -- but only if you itemize deductions on Schedule A instead of taking the standard deduction. You can deduct interest on up to $750,000 of mortgage debt ($375,000 if married filing separately) for homes purchased after December 15, 2017. Mortgages originated on or before that date retain the previous $1,000,000 limit.
2026 standard deduction: $30,000 (MFJ) | $15,000 (single) | $22,500 (HOH). Itemize only if your total itemized deductions exceed these amounts.
See How Much Interest You Pay Annually With Our Mortgage CalculatorWhat Is the Mortgage Interest Deduction?
The mortgage interest deduction allows homeowners to reduce their taxable income by the amount of interest paid on a qualified mortgage during the tax year. It is a below-the-line deduction claimed on Schedule A (Form 1040) when you itemize deductions.
The deduction reduces your taxable income, not your tax bill directly. The actual tax savings depend on your marginal tax rate:
- Example: $15,000 in deductible mortgage interest at a 22% marginal tax rate = $3,300 in tax savings
- Example: $15,000 in deductible mortgage interest at a 32% marginal tax rate = $4,800 in tax savings
To understand how marginal tax rates work and which bracket you fall into, see our 2026 Tax Brackets and Rates guide.
For a complete breakdown of how your monthly payment splits between principal and interest over time, see our Loan Amortization Schedule Explained guide.
Qualifying mortgages include:
- First and second home mortgages
- Refinanced mortgages (subject to the original limit)
- Home equity loans and HELOCs used for home improvement
Non-qualifying debt:
- Home equity debt used for non-home purposes (credit card payoff, car purchase, vacations)
- Mortgages on a third or subsequent property
The $750,000 Mortgage Limit Explained
Now that you understand what qualifies for the deduction, the next question is how much you can actually deduct. The answer depends on when you took out your mortgage and your total mortgage debt.
Current Rules (Post-December 15, 2017)
For mortgages originated after December 15, 2017, you can deduct interest on up to $750,000 of qualified mortgage debt ($375,000 if married filing separately). This limit applies to the combined balance of all mortgages on your primary and secondary homes.
- If your total mortgage debt is under $750,000, you can deduct 100% of qualified mortgage interest paid
- If your total mortgage debt exceeds $750,000, you deduct a prorated portion of the interest
$600,000 mortgage on primary home + $200,000 mortgage on vacation home = $800,000 total. You can deduct interest on $750,000 of the $800,000, which is 93.75% of interest paid. If you paid $48,000 in total interest, your deductible amount is $45,000.
Grandfathered Mortgages (Pre-December 16, 2017)
Mortgages originated on or before December 15, 2017 retain the previous $1,000,000 limit ($500,000 if married filing separately).
- If you refinance a grandfathered mortgage, the new mortgage retains the $1,000,000 limit only up to the balance of the old mortgage at the time of refinancing
- Cash-out refinancing: the portion above the original balance is subject to the $750,000 limit
H.R.1 (2025) Impact
The One Big Beautiful Bill Act (H.R.1), signed in 2025, made the TCJA provisions permanent, including the $750,000 mortgage interest deduction limit. This means the $750,000 limit is no longer set to expire -- it is the permanent deduction limit going forward.
H.R.1 also made the higher standard deduction amounts permanent, which continues to reduce the number of taxpayers who benefit from itemizing. For a complete breakdown of H.R.1's impact on standard deductions, see our 2026 Standard Deduction guide.
Should You Itemize or Take the Standard Deduction?
Understanding the deduction limit is only half the equation. The more important question for most homeowners is whether itemizing your deductions saves more than simply taking the standard deduction.
The mortgage interest deduction only helps you if itemizing saves you more than the standard deduction. Here are the 2026 standard deduction amounts:
| Filing Status | Standard Deduction |
|---|---|
| Single | $15,000 |
| Married filing jointly | $30,000 |
| Married filing separately | $15,000 |
| Head of household | $22,500 |
| Additional (age 65+ or blind) | +$1,550 (married) or +$1,950 (single) |
To determine if you should itemize, add up your potential itemized deductions:
| Itemized Deduction | Typical Amount |
|---|---|
| Mortgage interest | $5,000-$25,000 (depends on loan balance and rate) |
| State and local taxes (SALT, capped at $10,000) | Up to $10,000 |
| Charitable contributions | Varies ($0-$10,000+ typical) |
| Medical expenses (above 7.5% of AGI) | Usually $0 for most taxpayers |
Decision rule: If mortgage interest + SALT ($10,000 cap) + charitable contributions + other itemized deductions exceed your standard deduction, then itemize.
Example: Married Couple Who Benefits From Itemizing
- Mortgage interest: $18,000
- SALT: $10,000 (capped)
- Charitable: $4,000
- Total itemized: $32,000 > $30,000 standard deduction = itemize
- Extra deduction: $2,000 x 24% marginal rate = $480 in additional tax savings
A single filer with $8,000 in mortgage interest, $5,000 in SALT, and $1,000 in charitable contributions has $14,000 in total itemized deductions. That is less than the $15,000 standard deduction, so the standard deduction saves more. Approximately 90% of taxpayers fall into this category.
How Much Does the Mortgage Interest Deduction Save?
Your tax savings depend on two factors: how much mortgage interest you pay and your marginal tax rate. The following table shows the gross deduction savings in the first year of a mortgage at 6.5% interest.
| Mortgage Amount | Annual Interest (Year 1) | Savings at 22% | Savings at 24% | Savings at 32% |
|---|---|---|---|---|
| $200,000 | $12,870 | $2,831 | $3,089 | $4,118 |
| $300,000 | $19,305 | $4,247 | $4,633 | $6,178 |
| $400,000 | $25,740 | $5,663 | $6,178 | $8,237 |
| $500,000 | $32,175 | $7,079 | $7,722 | $10,296 |
| $750,000 (limit) | $48,263 | $10,618 | $11,583 | $15,444 |
Assumes 6.5% interest rate, 30-year fixed term. Savings calculated as annual interest multiplied by marginal tax rate. Actual benefit depends on your specific rate and whether your total itemized deductions exceed the standard deduction.
The table above shows gross deduction savings. The net benefit is only the amount by which your itemized deductions exceed the standard deduction, multiplied by your marginal rate. For example, a married couple with $32,000 in itemized deductions vs. a $30,000 standard deduction has a net benefit of $2,000 x 24% = $480 in additional tax savings from itemizing.
The mortgage interest deduction is most valuable for homeowners with large mortgages (above $400,000), higher-income taxpayers in the 32%+ brackets, and homeowners who also have high SALT payments and charitable contributions. To see how your mortgage size affects total payments, try our How Much House Can I Afford guide. If you are considering using savings for a larger down payment to reduce your deductible interest, compare how those funds could perform in a high-yield savings account or CD instead.
Calculate Your Annual Mortgage InterestHow to Claim the Mortgage Interest Deduction (Step by Step)
Step 1: Get Your Form 1098
Your mortgage lender sends Form 1098 (Mortgage Interest Statement) by January 31 each year. Form 1098 reports:
- Total mortgage interest paid during the tax year
- Mortgage insurance premiums (if applicable)
- Points paid at closing
- Outstanding mortgage principal balance
Keep this form with your tax records -- you will need the interest amount for Schedule A.
Step 2: Determine if Itemizing Makes Sense
Add up all your potential itemized deductions (mortgage interest, SALT, charitable, medical) and compare to the standard deduction for your filing status. If your itemized total exceeds the standard deduction, proceed with itemizing.
Tax software such as TurboTax and H&R Block will automatically calculate which option saves you more. For a detailed breakdown of standard deduction amounts, see our 2026 Standard Deduction guide.
Step 3: Complete Schedule A
- Enter your mortgage interest on Line 8a (or Line 8b if not reported on Form 1098) of Schedule A
- Enter your SALT deduction on Lines 5a-5e (capped at $10,000)
- Enter charitable contributions on Lines 12-14
- The total on Line 17 is your total itemized deductions
- Transfer this amount to Form 1040, Line 12
Step 4: Handle Multiple Properties or High Balances
- Mortgage debt exceeds $750,000: Calculate the percentage of debt that is deductible ($750,000 divided by your total mortgage debt) and apply that percentage to total interest paid
- Primary home and second home: Combine the mortgage balances and apply the $750,000 limit to the combined total
- HELOC: Interest is deductible only if funds were used to buy, build, or substantially improve the home. Keep records of how HELOC funds were used
For more detail on how your mortgage payment breaks down between principal and interest, see our PITI Explained guide.
Special Situations
Mortgage Points
Points (also called discount points) are prepaid interest charged at closing to reduce your mortgage rate. One point equals 1% of the loan amount. On a $400,000 mortgage, 1 point = $4,000.
- Points paid on the purchase of your primary home are fully deductible in the year paid
- Points paid on a refinance must be amortized (deducted proportionally over the life of the loan)
For more on closing costs including points, see our Closing Costs Explained guide.
Home Equity Loans and HELOCs
Interest on home equity debt is deductible only if the loan proceeds are used to "buy, build, or substantially improve" the home that secures the loan.
- Using HELOC funds for non-home purposes (debt consolidation, car purchase, vacation) = interest NOT deductible
- The home equity loan balance counts toward the $750,000 combined mortgage debt limit
$500,000 first mortgage + $100,000 HELOC for kitchen renovation = $600,000 total debt. All interest is deductible because the combined balance is under $750,000 and the HELOC was used for home improvement.
Refinancing
When you refinance, the new mortgage retains the deduction rules based on the original mortgage date:
- Pre-December 16, 2017 refinance: retains the $1,000,000 limit (up to the balance of the original mortgage)
- Cash-out portion above the original balance: subject to the $750,000 limit
- Points paid on a refinance must be deducted proportionally over the life of the new loan (unlike purchase points which are deducted in the year paid)
To understand the difference between your interest rate and APR when comparing refinance offers, see our APR vs Interest Rate guide.
Second Homes
Mortgage interest on a second home is deductible under the same rules as your primary home:
- Combined mortgage debt on primary + second home is subject to the $750,000 limit
- The second home can be a house, condo, townhouse, mobile home, or boat with sleeping, cooking, and toilet facilities
- If you rent out the second home, special rules apply: personal use must exceed 14 days or 10% of rental days (whichever is greater) for it to qualify as a "second home" rather than rental property
How the Deduction Changes Over Time
As your mortgage amortizes, the annual interest paid decreases each year because more of each payment goes toward principal. This means the mortgage interest deduction is most valuable in the early years of the mortgage.
| Mortgage Year | Approximate Annual Interest | Tax Savings at 24% |
|---|---|---|
| Year 1 | $25,740 | $6,178 |
| Year 10 | $22,000 | $5,280 |
| Year 20 | $15,000 | $3,600 |
| Year 30 | $2,000 | $480 |
Based on a $400,000, 30-year fixed mortgage at 6.5%. Approximate values. Use our Mortgage Calculator for exact amortization figures.
As the interest portion shrinks, you may eventually reach a point where your total itemized deductions no longer exceed the standard deduction -- at which point the deduction no longer provides a tax benefit. Homeowners who refinance effectively "restart" the interest-heavy period of amortization.
For a detailed explanation of how amortization works, see our Loan Amortization Schedule Explained guide. To understand how your down payment affects the total interest you pay, review our Down Payment Guide.
Frequently Asked Questions
Is mortgage interest still tax deductible in 2026?
Yes. Mortgage interest remains tax deductible in 2026 for homeowners who itemize deductions on Schedule A. The deduction limit is $750,000 of qualified mortgage debt (or $1,000,000 for mortgages originated before December 16, 2017). However, you only benefit if your total itemized deductions exceed the standard deduction for your filing status.
What is the mortgage interest deduction limit for 2026?
The limit is $750,000 of total mortgage debt ($375,000 if married filing separately) for mortgages originated after December 15, 2017. Pre-2018 mortgages retain the $1,000,000 limit. These limits were made permanent by H.R.1 (2025).
Should I itemize or take the standard deduction?
Itemize if your total itemized deductions (mortgage interest + SALT up to $10,000 + charitable contributions + medical expenses above 7.5% of AGI + other) exceed the standard deduction: $30,000 (married filing jointly), $15,000 (single), $22,500 (head of household). Approximately 90% of taxpayers benefit more from the standard deduction.
Can I deduct HELOC interest?
Only if the HELOC funds were used to buy, build, or substantially improve the home securing the loan. Interest on HELOC funds used for other purposes (debt consolidation, car purchase) is NOT deductible. The HELOC balance also counts toward the $750,000 combined mortgage debt limit.
How much does the mortgage interest deduction save?
The savings depend on your mortgage interest paid and your marginal tax rate. At a 24% marginal rate, $15,000 in deductible mortgage interest saves $3,600 in taxes. However, the net benefit is only the amount by which your itemized deductions exceed the standard deduction, multiplied by your marginal rate. Use our Mortgage Calculator to see your annual interest payments.
Can I deduct mortgage interest on a second home?
Yes. Interest on mortgages for both your primary home and one second home is deductible, subject to the combined $750,000 limit. The second home must have sleeping, cooking, and toilet facilities. Special rules apply if you rent out the second home -- personal use must exceed 14 days or 10% of rental days.
What happens when I refinance?
The new mortgage retains the deduction rules of the original mortgage. If you had a pre-2018 mortgage with the $1,000,000 limit, the refinanced mortgage keeps that limit up to the old balance. Any cash-out amount above the original balance is subject to the $750,000 limit. Points paid on a refinance are amortized over the loan life.
Is the mortgage interest deduction going away?
No. H.R.1 (the One Big Beautiful Bill Act of 2025) made the $750,000 deduction limit and the higher standard deduction amounts permanent. These provisions were previously set to expire under the 2017 TCJA but have been permanently extended.
Key Takeaways and Next Steps
- Mortgage interest is tax deductible in 2026 if you itemize -- the limit is $750,000 of mortgage debt ($1,000,000 for pre-2018 mortgages), made permanent by H.R.1.
- Most homeowners (~90%) benefit more from the standard deduction ($30,000 MFJ) than from itemizing -- the deduction primarily benefits homeowners with large mortgages and high combined itemized deductions.
- The tax savings equal your deductible mortgage interest multiplied by your marginal tax rate: $15,000 in interest at a 24% rate = $3,600 saved.
- The deduction value decreases over time as your mortgage amortizes and interest payments decline -- it is most valuable in the early years.
- Use our Mortgage Calculator to see your annual interest payments and determine the value of the mortgage interest deduction for your specific situation.
The best approach depends on your individual tax situation. Start by gathering your Form 1098, adding up your potential itemized deductions, and comparing them to the standard deduction for your filing status. If you are unsure, consult a qualified tax professional.
See Your Annual Mortgage Interest With Our CalculatorFor more home buying and tax guidance, explore our First-Time Homebuyer Guide 2026, learn about PMI strategies, review Capital Gains Tax Strategies 2026, or explore Tax-Loss Harvesting for broader tax optimization.
Sources
- IRS Publication 936 -- Home Mortgage Interest Deduction (opens in new tab)
- IRS -- Schedule A (Form 1040), Itemized Deductions (opens in new tab)
- IRS -- Interest on Home Equity Loans Often Still Deductible Under New Law (opens in new tab)
- H.R.1 -- One Big Beautiful Bill Act (119th Congress) (opens in new tab)
- IRS -- Tax Inflation Adjustments for Tax Year 2026 (opens in new tab)
- Consumer Financial Protection Bureau -- Owning a Home (opens in new tab)