Mortgage interest deduction: limits and who can claim it in 2026

Can I deduct mortgage interest? Who qualifies

Yes, if you itemize and the loan meets the rules. The mortgage interest deduction is an itemized deduction, so it only helps when your Schedule A total beats your standard deduction ($16,100 single, $32,200 joint for 2026). If you take the standard deduction, the interest you paid gives you no separate tax break.

Beyond itemizing, IRS Publication 936 sets out these conditions:

A qualified home can be a house, condominium, cooperative apartment, mobile home, or even a boat or RV, as long as it has sleeping, cooking and toilet facilities. You can count your main home and one second home. Interest on a third property is personal interest and is not deductible, unless the property is a rental, in which case it belongs on Schedule E, not Schedule A.

Mortgage interest deduction limits in 2026

The limit is on the loan balance, not on the interest. It applies to home acquisition debt, meaning money used to buy, build or substantially improve the home that secures the loan. The 2025 tax law made the post-2017 limits permanent, so they apply to 2026 and later years with no scheduled end date.

The limits cover your main and second home combined. If you have an older loan, its balance counts against the $750,000 limit for any newer debt. A refinance keeps the older date only up to the balance that was refinanced; any cash-out beyond that is new debt.

What happens if your loan is over the limit

You deduct a share of the interest. Publication 936 has a worksheet that uses your average balance for the year. For example, if a mortgage taken out in 2023 averaged $900,000 and you paid $54,000 of interest, the deductible share is $750,000 divided by $900,000, or 83.3%. You would deduct $45,000 and the remaining $9,000 would be nondeductible personal interest.

Is home equity loan interest deductible?

Only when the money went into the home. Interest on a home equity loan or line of credit is deductible if you used the proceeds to buy, build or substantially improve the home that secures it, and the total debt stays within the limits above. Spending the money on a car, tuition, a vacation or paying off credit cards makes that interest nondeductible, no matter when the loan started.

Substantial improvements add value, extend the home's life or adapt it to a new use: a new roof, an addition, a remodeled kitchen. Routine repairs such as repainting do not count. Keep contractor invoices and bank records showing where the loan money went, because the lender's Form 1098 does not report how you spent it.

Mortgage insurance premium deduction returns for 2026

Mortgage insurance premiums, including private mortgage insurance (PMI) and premiums on FHA, VA and USDA loans, are deductible again starting with 2026 returns. The deduction had expired after 2021. The 2025 law restored it permanently for insurance contracts issued after December 31, 2006, on acquisition debt for a main or second home.

The income phaseout still applies. The deduction shrinks by 10% for each $1,000 (or part of $1,000) that your AGI exceeds $100,000, or each $500 above $50,000 if married filing separately. That means it is gone entirely once AGI passes $109,000 ($54,500 married filing separately).

Form 1098 and what to enter on Schedule A

Your lender sends Form 1098 by early February if you paid $600 or more of interest. Here is what each box means for the interest section of Schedule A:

• Box 1: mortgage interest you paid during the year. This is your starting number.
• Box 2: outstanding principal at the start of the year, which helps you check the $750,000 limit.
• Box 3: the origination date, which tells you whether the $1 million or $750,000 limit applies.
• Box 4: refunds of overpaid interest from an earlier year, which may be income if you deducted it before.
• Box 5: mortgage insurance premiums, deductible for 2026 subject to the phaseout.
• Box 6: points paid on the purchase of a main home.

Points on a purchase loan for your main home are usually deductible in full in the year paid if they meet the tests in Publication 936. Points on a refinance are generally spread over the life of the loan. If you paid interest to a private lender or seller who did not issue a Form 1098, you can still deduct it, but you must give that person's name, address and taxpayer ID on Schedule A.

Is the mortgage interest deduction worth claiming?

Run the numbers with your other items. A single filer who paid $12,000 of mortgage interest and $6,000 of property and state income tax has $18,000 of itemized deductions, beating the $16,100 standard deduction by $1,900. A joint couple with the same numbers would still be $14,200 short of their $32,200 standard deduction and gets no benefit from the interest.

Property tax belongs in the state and local tax total, not the interest section; see the SALT deduction cap for that limit. Our itemize or standard deduction guide walks through the full comparison, and charitable deduction limits covers the other big Schedule A item most homeowners have.