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Mortgage Interest Deduction

How much does your mortgage save you in tax?

Enter your loan, your tax rates, and the other deductions you have. We’ll show whether itemizing beats the standard deduction for you, and how much federal and state income tax your mortgage interest saves each year.

  1. You only benefit if you itemize

    Every filer gets a flat ($32,200 married filing jointly for 2026). Mortgage interest only counts if you instead, and only by the amount your itemized total beats that flat amount.

  2. Interest counts up to a loan cap

    Interest on up to $750,000 of mortgage debt is deductible ($1,000,000 for loans from before December 16, 2017). Your property and state income taxes count too, up to the .

  3. Savings = extra deduction × your tax rate

    The deduction above the standard amount is multiplied by your (federal plus state) to get the tax you save. We also show how much of that is due to the mortgage alone.
Your last tax return has most of these numbers. Schedule A lists property tax, state income tax, and charity, and Form 1098 from your lender shows the interest you paid. The mortgage interest deduction guide walks through worked examples.
The mortgage

Your current loan. The interest you pay is highest in the early years, which is when the deduction is worth the most.

$
%
yr
When the loan started

Older loans keep a $1,000,000 cap; newer loans are capped at $750,000.

Your tax rates

Your filing status and the rate on your top dollar of income. These turn a deduction into dollars of tax saved.

Filing status
%
%
Your other deductions

Things you’d itemize even without a mortgage. They decide how much of the interest gets past the standard deduction.

$
$
$
$
Income limits (optional)

Only needed if you pay mortgage insurance or earn more than $505,000. Leave blank to skip.

$
$/ yr

Tax your mortgage interest saves you each year

$5,259/yr

Itemizing beats the standard deduction by $18,135, which saves $5,259 a year at your 29.0% combined rate. $5,259 of that comes from the mortgage: it’s the extra tax you’d pay with no mortgage interest to deduct. Your after-tax mortgage rate is 5.44% instead of the 6.5% you’re charged.

Interest paid in year 1

$32,335

monthly principal + interest: $3,160

Deductible interest

$32,335

all of it is deductible

State & local taxes (SALT)

$14,000

$8,000 property + $6,000 income tax, under the $40,400 cap

Total itemized deductions

$50,335

interest + SALT + other

Standard deduction

$32,200

married filing jointly, 2026

Better choice

Itemize

itemizing beats standard by $18,135

What this means

In the first year you’d pay about $32,335 in interest. Without the mortgage you’d take the standard deduction, so only the $18,135 of deductions that pushes you past it saves tax: about $5,259 at your 29.0% combined rate. The interest part of each payment shrinks as the balance falls, so the savings fade over time (see below).

This uses your top (marginal) rates and assumes your other deductions stay the same. The guide explains the after-tax rate and common mistakes.

How the savings shrink over time

Each payment pays down more of the loan and less interest, so there’s less to deduct each year. Assumes your other deductions and tax rates stay the same.

Year 1

$5,259

$32,335 interest paid

Year 5

$4,780

$30,681 interest paid

Year 10

$3,975

$27,908 interest paid

What this models, and what it doesn’t

The $750,000 / $1,000,000 cap applies only to : money borrowed to buy, build, or substantially improve your home. Interest on cash-out refinance money spent on anything else isn’t deductible.

Interest on home equity loans and is deductible only if the money pays for qualifying home improvements. The pre-2018 deduction for any use of a HELOC was eliminated by the .

The cap is shared across your main home plus one second home. With three or more homes, you pick which two.

If you’re married filing separately, each spouse gets half the cap ($375,000 or $500,000). This often creates a marriage penalty in high-cost areas.

The mortgage insurance (PMI/MIP) deduction expired after 2021, but the OBBBA restored it permanently starting with tax year 2026 (treated as mortgage interest, phased out between $100,000 and $109,000 of AGI). Enter your premium and AGI above to include it in the year-1 numbers.

The One Big Beautiful Bill Act (, July 2025) kept the TCJA rules from expiring. The $750,000 mortgage cap and the higher standard deduction are now permanent. The SALT cap rose from $10,000 to $40,000 for 2025 and $40,400 for 2026 (rising 1% a year through 2029), and shrinks by 30% of above $505,000 (never below $10,000; applied above if you enter your income). Without further legislation it returns to $10,000 after 2029.

See the full guide for more on cash-out refinances, refinance grandfathering, and deducting points. Tax law depends on your specific facts, so check edge cases with a CPA.

Results are estimates based on your inputs and the assumptions on this page, not quotes or advice. A lender, servicer, or tax advisor will give you different numbers. Disclaimer

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Terms used on this page

Your mortgage only cuts your tax if itemizing beats the standard deduction. These are the terms behind that test.

Standard deduction
A flat amount every filer can subtract from income without listing expenses: $16,100 single or $32,200 married filing jointly for 2026.
Itemizing
Listing your actual deductible expenses (mortgage interest, state and local taxes, charity) instead of taking the standard deduction. You get whichever is larger, never both.
Acquisition debt
Mortgage debt used to buy, build, or substantially improve the home that secures it. Only interest on this debt is deductible, up to $750,000 of balance ($1,000,000 for loans from on or before December 15, 2017).
Marginal tax rate
The rate on your next dollar of income. A deduction saves you roughly the deduction times this rate, so $1,000 in the 24% bracket saves about $240.
SALT cap
The limit on deducting state and local income and property taxes together: $40,400 for 2026, shrinking for incomes above $505,000 but never below $10,000. More
AGI and MAGI
Adjusted gross income is your income after certain adjustments, the last line on page one of Form 1040. Modified AGI adds a few items back; often the two are the same.
Mortgage insurance (PMI, MIP)
Insurance that protects the lender when you put down less than 20%. From 2026 the premiums are deductible as mortgage interest again, phasing out between $100,000 and $109,000 of AGI. More
After-tax mortgage rate
Your interest rate after subtracting the tax the interest saves you. If the deduction saves nothing, your after-tax rate equals the rate you’re charged.
TCJA and OBBBA
The 2017 Tax Cuts and Jobs Act set the $750,000 mortgage cap and a $10,000 SALT cap. The 2025 One Big Beautiful Bill Act made the mortgage cap permanent and raised the SALT cap. More

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