The mortgage interest deduction lets homeowners reduce taxable income by the interest they pay on a qualifying mortgage. But the 2017 tax law changed who actually benefits.
You can deduct interest on up to $750,000 of mortgage debt for a primary or secondary home. The deduction is only valuable if you itemize deductions instead of taking the standard deduction.
The standard deduction is large enough now ($14,600 single, $29,200 married in 2024) that most homeowners do not itemize. If your mortgage interest plus other deductions is under that, the deduction does nothing for you.
Big mortgages in high-tax states, combined with the state and local tax (SALT) deduction, are the cases where itemizing usually wins. Early in a loan, when interest is front-loaded, is when the deduction matters most.
Do not buy a house for the tax deduction. Treat it as a small bonus at most. Focus on the actual cost — our calculator shows total interest, which is the number that really matters.
Reading is step one. Step two is running your own numbers — taxes, insurance, PMI and all.
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