Is Mortgage Interest Tax Deductible? The 2026 Rules for Buyers

"You can write off the interest" is one of the most repeated reasons to buy instead of rent. It is true for some buyers and close to meaningless for others. It helps only if three things line up: your loan is within the IRS debt limit, you itemize, and your itemized total beats the standard deduction. The rules below come from IRS Publication 936. As of October 14, 2026, the final edition is Publication 936 (2025), written for 2025 returns filed in 2026. The 2026 edition, for returns filed in 2027, is still an early-release draft.

1. The basic rule

IRS Publication 936 explains that you can deduct home mortgage interest if you file Form 1040 or 1040-SR and itemize deductions on Schedule A, and the loan is secured by a qualified home, meaning your main home or a second home.

That first condition is the one many buyers miss. If you take the standard deduction, the mortgage interest deduction does nothing for you, no matter how much interest you pay.

2. How much debt counts

Publication 936 sets the limit on the loan balance whose interest you can deduct:

• For mortgages taken out after December 15, 2017, to buy, build, or substantially improve your home: interest on up to $750,000 of debt, or $375,000 if married filing separately.
• For older debt incurred before December 16, 2017: higher limits of $1 million, or $500,000 if married filing separately.

A first-time buyer today falls under the $750,000 limit. If your loan is larger, only part of the interest is deductible, and Publication 936 includes a worksheet to figure that share.

2.1. Home equity loans

Publication 936 also notes that interest on a loan secured by your home is not deductible to the extent the money was not used to buy, build, or substantially improve that home. A home equity line used to pay off a car, for example, does not produce deductible mortgage interest.

3. The standard deduction is the real test

For tax year 2026, the IRS set the standard deduction at:

Itemizing only helps if your itemized deductions add up to more than this. And even then, the tax benefit is only on the amount above the standard deduction, not on all of your interest.

4. A worked example

Assumptions, for illustration only:

• $400,000 mortgage, 30-year fixed at 6.5%, starting in January.
• First-year interest: about $25,868.
• Other itemized deductions you would claim anyway: $4,000.
• Total itemized deductions: about $29,868.

A single filer compares $29,868 with the $16,100 standard deduction. Itemizing adds $13,768 in deductions. If that whole amount falls in the 22% bracket, the tax saving is about $3,029 for the year. That is real, but it is not the $25,868 of interest you paid. It is roughly 12% of it.

A married couple filing jointly compares the same $29,868 with a $32,200 standard deduction. The standard deduction is larger by $2,332, so itemizing would cost them money. For this couple, the mortgage interest deduction is worth $0 unless their other deductions grow.

5. The benefit shrinks over time

On an amortizing loan, the interest portion of each payment falls as the balance comes down. On the same $400,000 loan, interest is about $25,868 in year one, about $24,545 in year five, and about $22,327 in year ten. Meanwhile, the standard deduction is adjusted for inflation over time. So the gap that makes itemizing worthwhile tends to narrow each year.

6. Mortgage insurance premiums for tax year 2026

If you put less than 20% down, you may be paying mortgage insurance. The 2025 version of Publication 936 said the itemized deduction for those premiums had expired. The IRS's draft Publication 936 for 2026 returns says the deduction has been reinstated for tax year 2026, claimed on line 8d of Schedule A.

According to the draft:

• Qualified mortgage insurance includes coverage from the VA, the FHA, the Rural Housing Service, and private mortgage insurance.
• The insurance must relate to home acquisition debt on a first or second home, under a contract issued after 2006.
• The deduction is limited if your AGI is above $100,000 ($50,000 if married filing separately), and it is eliminated above $109,000 ($54,500 if married filing separately).

Because the 2026 edition is still a draft as of October 14, 2026, check the final version before you file a 2026 return.

7. Your Form 1098

Publication 936 says that if you pay $600 or more of mortgage interest on a loan during the year, you will generally receive Form 1098 from the lender. It shows the interest you paid and, where applicable, mortgage insurance premiums and deductible points. Keep it with your tax records; it is the starting number for Schedule A.

8. How to use this before you buy

1. Estimate your first-year interest from the loan amount and rate on your Loan Estimate.
2. Add the other itemized deductions you expect to claim.
3. Compare the total with the 2026 standard deduction for your filing status.
4. Count only the amount above the standard deduction, multiplied by your tax bracket, as the yearly benefit.
5. Do not assume the benefit when comparing the cost of owning with renting unless step 4 produces a number above zero.

9. Key takeaways

• Mortgage interest is deductible only if you itemize on Schedule A.
• For loans taken out after December 15, 2017, the limit is interest on $750,000 of debt ($375,000 married filing separately).
• The 2026 standard deduction is $16,100 single, $24,150 head of household, and $32,200 married filing jointly.
• In the example, a single filer saves about $3,029 in year one, while a married couple filing jointly saves nothing.
• The draft 2026 Publication 936 reinstates the mortgage insurance premium deduction, phased out between $100,000 and $109,000 of AGI.