Mortgage Interest Deduction Calculator
Calculate your mortgage interest deduction and find out whether itemizing or taking the standard deduction saves you more on taxes in 2026.
Mortgage Details
Other Itemized Deductions
Itemizing Saves You More
$36,000
total itemized deductions
Extra Savings from Itemizing:
$4,378
$19,900 above standard deduction x 22% marginal rate
Deduction Breakdown
Mortgage under $750,000 limit
Itemized vs Standard Deduction
Itemized
$36,000
Tax savings: $7,920
Better Choice
Standard
$16,100
Tax savings: $3,542
Estimated Tax Savings
At your marginal tax rate of 22%, your total deduction of $36,000 saves you approximately $7,920 in federal income taxes.
Important Note
The TCJA limited the mortgage interest deduction to $750,000 of acquisition debt for loans after December 15, 2017. The SALT deduction is capped at $10,000 ($5,000 for married filing separately). These limits are current through 2026.
Understanding the Mortgage Interest Deduction
$750K Mortgage Limit
For loans originated after December 15, 2017, you can deduct interest on up to $750,000 of mortgage debt ($375,000 for married filing separately). Pre-TCJA loans keep the $1M limit.
SALT Cap ($10K)
State and local taxes (property tax + state income/sales tax) are capped at $10,000 total. This significantly limits deductions in high-tax states.
Points Deduction
Mortgage points (origination fees) paid at closing are generally deductible in the year paid for a purchase, or amortized over the loan term for a refinance.
Special Rules for Self-Employed Homeowners
Home Office Deduction
Self-employed individuals can deduct a portion of mortgage interest as a business expense through the home office deduction. This is separate from Schedule A itemized deductions.
No Double-Dipping
The portion of mortgage interest claimed as a home office deduction on Schedule C cannot also be claimed on Schedule A. Split your interest accordingly.
Rental Property
Mortgage interest on rental properties is deductible on Schedule E, not Schedule A. There is no $750K limit on rental property mortgage interest.
Mortgage Interest Deduction Limits Under Current Tax Law
The Tax Cuts and Jobs Act (TCJA) reduced the mortgage interest deduction limit from $1,000,000 to $750,000 of acquisition indebtedness for loans originated after December 15, 2017. Married couples filing separately can each deduct interest on up to $375,000. Taxpayers with mortgages originated on or before that date retain the legacy $1,000,000 limit ($500,000 MFS), even if they refinance the loan -- provided the refinanced amount does not exceed the outstanding principal at the time of refinancing.
The deduction applies only to acquisition indebtedness -- loans used to buy, build, or substantially improve a qualified residence. Home equity loan interest is deductible only if the funds are used to buy, build, or improve the home securing the loan. A HELOC used for a kitchen renovation qualifies; a HELOC used to pay off credit card debt does not. This change under the TCJA applies through at least 2025, with potential extensions under pending legislation.
Form 1098, issued by mortgage lenders by January 31 each year, reports the total interest paid, points paid on purchase, and the outstanding mortgage principal. Taxpayers with multiple properties should receive separate 1098 forms for each loan. The deduction is available for a primary residence and one second home, but interest on loans for a third or subsequent property is not deductible.
Standard Deduction vs. Itemizing with Mortgage Interest
The 2026 standard deduction is $16,100 for single filers and $32,200 for married filing jointly. Taxpayers should itemize only when their total Schedule A deductions -- mortgage interest, state and local taxes (SALT), charitable contributions, and medical expenses above 7.5% of AGI -- exceed the standard deduction. The TCJA's near-doubling of the standard deduction means roughly 87% of taxpayers now take the standard deduction.
The SALT deduction cap of $10,000 ($5,000 MFS) limits the combined deduction for state income taxes, local income taxes, and property taxes. In high-tax states like California, New York, and New Jersey, many homeowners hit this cap with property taxes alone, reducing the incremental benefit of itemizing. A homeowner paying $12,000 in property taxes and $8,000 in state income tax can only deduct $10,000 of that $20,000 total.
| Filing Status | Standard Deduction 2026 | Break-Even Itemized Total |
|---|---|---|
| Single | $16,100 | Must exceed $16,100 |
| Married Filing Jointly | $32,200 | Must exceed $32,200 |
| Head of Household | $24,150 | Must exceed $24,150 |
| Married Filing Separately | $16,100 | Must exceed $16,100 |
Mortgage Points, Refinancing, and PMI Deduction Rules
Mortgage points (origination fees or discount points) paid at closing on a home purchase are generally deductible in full in the year paid, provided the points are a standard practice in the area and do not exceed typical amounts. Each point equals 1% of the loan amount -- 2 points on a $400,000 mortgage equals $8,000. For a refinance, points must be amortized over the life of the loan. On a 30-year refinance, $6,000 in points yields a $200 annual deduction.
Private mortgage insurance (PMI) premiums have historically been tax-deductible for mortgages originated after 2006, though Congress has repeatedly allowed this provision to expire and then retroactively extended it. As of 2026, check current legislation for PMI deductibility status. PMI is typically required when the down payment is less than 20% of the purchase price and costs between $50 and $150 per month for a conventional loan.
When refinancing, any unamortized points from the original loan become fully deductible in the year the old loan is paid off. For example, if you paid $6,000 in points on a 30-year loan in 2020 and refinance in 2026, the remaining $4,800 in unamortized points (24 years remaining) is deductible in 2026. The new loan's points begin a fresh amortization schedule over the new loan term.
Official References
This calculator uses current IRS rules for mortgage interest deductions:
- IRS Publication 936 - Home Mortgage Interest Deduction
Official guidance on deducting home mortgage interest
- IRS Schedule A (Form 1040)
Form for itemized deductions including mortgage interest
- IRC Section 163(h) - Interest on Qualified Residence
Tax code section governing mortgage interest deduction rules
This calculator provides estimates. Your actual tax liability may vary. Consult a tax professional for personalized advice. Tax rates and limits accurate as of January 2026.