Short Answer
Under IRC §163(h) you can deduct interest on home acquisition debt up to $750,000 ($375,000 married filing separately) for debt taken out after December 15, 2017, or $1,000,000 ($500,000 separately) for older debt. If your average mortgage balance is below the limit, all the interest is deductible; if it is above, you deduct (limit ÷ average balance) of the interest. Interest on a home-equity loan counts only if the money was used to buy, build, or substantially improve the home. Mortgage insurance premiums are deductible again for 2026 (phasing out above $100,000 of AGI) but were expired for 2025. The deduction goes on Schedule A, so it only helps if you itemize.
2026 and 2025 Mortgage Interest Deduction Limits
Home Mortgage Interest Deduction — IRC §163(h) Acquisition-Debt Limits
| Figure | Tax Year 2026 | Tax Year 2025 |
|---|
| Acquisition-debt limit (debt after Dec 15, 2017) | $750,000 | $750,000 |
| Same limit, married filing separately | $375,000 | $375,000 |
| Acquisition-debt limit (Oct 1987 to Dec 2017 debt) | $1,000,000 | $1,000,000 |
| Same limit, married filing separately | $500,000 | $500,000 |
| Pre-October-1987 grandfathered debt | No limit | No limit |
| Home-equity interest (not buy/build/improve) | Not deductible | Not deductible |
| Mortgage insurance premiums | Deductible (AGI phase-out) | Expired |
| Mortgage insurance phase-out begins (AGI) | $100,000 / $50,000 MFS | n/a |
The One Big Beautiful Bill Act (P.L. 119-21) made the $750,000 acquisition-debt limit and the home-equity disallowance permanent, removing the sunset that would otherwise have returned the limit to $1,000,000 after 2025. It also restored the mortgage insurance premium deduction for tax years beginning after December 31, 2025. Sources: IRC §163(h) and IRS Publication 936.
How the Mortgage Interest Deduction Calculation Works
This tool follows IRS Publication 936. For the full rules - the $750K vs $1M limit, home-equity tracing, points, and the 2026 mortgage insurance comeback - see the Mortgage Interest Deduction Guide.
Step 1: Find Your Acquisition-Debt Limit Confirmed
The limit depends on when you took out the loan: $750,000 for debt incurred after December 15, 2017, or $1,000,000 for debt from October 14, 1987 through December 15, 2017. Married filing separately uses half. Debt from on or before October 13, 1987 is grandfathered with no limit.
Step 2: Apply the Qualified-Loan-Limit Ratio Confirmed
If your average mortgage balance is at or below the limit, all the acquisition-debt interest is deductible. If the balance exceeds the limit, you deduct only the interest times the limit divided by the average balance, the qualified-loan-limit method in Pub 936 Table 1. The rest is nondeductible.
Step 3: Remove Nonqualifying Home-Equity Interest Confirmed
Interest on a home-equity loan or line of credit is deductible only if the proceeds were used to buy, build, or substantially improve the home that secures the loan. Any home-equity interest you enter as used for other purposes is dropped from the deduction.
Step 4: Add Deductible Mortgage Insurance (2026) Confirmed
For 2026 and later, qualified mortgage insurance premiums on acquisition debt are treated as deductible interest, reduced by 10% for each $1,000 of AGI over $100,000 ($50,000 married filing separately) and eliminated above $109,000 ($54,500). For 2025 the premium deduction is expired, so the tool deducts none of it.
Step 5: Report on Schedule A Confirmed
The total deductible interest goes on Schedule A (Form 1040), line 8a if it appears on Form 1098, or line 8b otherwise. Because it is an itemized deduction, it reduces your tax only if your total itemized deductions exceed your standard deduction.
Frequently Asked Questions
How much mortgage interest can I deduct?
You can deduct the interest on home acquisition debt up to the limit that applies to when you took out the loan. For debt incurred after December 15, 2017, the limit is $750,000 ($375,000 if married filing separately); for debt incurred from October 14, 1987 through December 15, 2017, it is $1,000,000 ($500,000 separately). If your average mortgage balance is below the limit, all the interest is deductible. If it is above the limit, you deduct the interest times the limit divided by the average balance. You must itemize on Schedule A to claim it.
What is the mortgage interest deduction limit for 2025 and 2026?
The acquisition-debt limit is the same for both years: $750,000 ($375,000 married filing separately) for debt incurred after December 15, 2017, and $1,000,000 ($500,000 separately) for older debt. The One Big Beautiful Bill Act made the $750,000 limit permanent, removing the sunset that would otherwise have returned it to $1,000,000 after 2025. The only year-to-year difference is mortgage insurance premiums, which are deductible again starting in 2026 but were expired for 2025.
Is home equity loan interest deductible?
Only if you used the loan proceeds to buy, build, or substantially improve the home that secures the loan. Interest on a home equity loan or line of credit used for anything else, such as paying off a car, credit cards, or tuition, is not deductible. This rule was made permanent by the One Big Beautiful Bill Act. When the proceeds do improve the home, the debt is treated as acquisition debt and counts toward the $750,000 or $1,000,000 limit.
Are mortgage insurance premiums deductible in 2026?
Yes. The One Big Beautiful Bill Act restored the deduction for qualified mortgage insurance premiums on acquisition debt, treating them as deductible mortgage interest for tax years beginning after December 31, 2025. The deduction phases out as adjusted gross income rises above $100,000 ($50,000 if married filing separately), reduced 10 percent for each $1,000 of excess and fully eliminated once AGI exceeds $109,000 ($54,500 separately). For tax year 2025, the premium deduction was expired and cannot be claimed.
Do I have to itemize to deduct mortgage interest?
Yes. Home mortgage interest is an itemized deduction reported on Schedule A (Form 1040), so it only reduces your tax if your total itemized deductions exceed your standard deduction. With the large standard deduction in place, many homeowners with modest mortgages now take the standard deduction instead, in which case the mortgage interest produces no separate tax benefit.
Is mortgage interest on a second home deductible?
Yes. A qualified residence is your main home plus one other residence you select. Interest on the mortgages for both homes is deductible, but the combined balances are tested against a single acquisition-debt limit ($750,000 or $1,000,000 depending on the loan dates), not a separate limit for each home. If you own more than one second home, you choose which one counts each year.
Are mortgage points deductible?
Points paid to buy or build your main home are generally deductible in the year paid if they meet the IRS tests in Publication 936; otherwise they are deducted ratably over the life of the loan. Points on a refinance or a second home are normally spread over the loan term, except for the portion used to substantially improve your main home. This calculator focuses on the interest limit and does not amortize points.
Did the One Big Beautiful Bill Act change the mortgage interest deduction?
Yes, but mainly by making existing rules permanent. It locked in the $750,000 acquisition-debt limit and the home-equity-debt disallowance that were scheduled to expire after 2025, so the limit no longer reverts to $1,000,000. It also restored the mortgage insurance premium deduction for tax years beginning after December 31, 2025. The dollar limits and the qualified-residence rules themselves were not changed.
What to Do Next
If Your Balance Is Below the Limit
All your acquisition-debt interest is deductible, so the question is whether to itemize. Add your mortgage interest to your other itemized deductions and compare with your standard deduction using the Itemize vs Standard Deduction Calculator.
If Your Balance Is Over the Limit
Only the portion of interest tied to the first $750,000 (or $1,000,000) is deductible. Before refinancing or buying up, model the after-tax cost of the excess debt, and read how the limit interacts with your other write-offs in the Itemized Deductions List.
If You Have a HELOC
Confirm the proceeds were used to buy, build, or substantially improve the home; only then is the interest deductible. Keep a record of the spending, and review the full home-equity rule in the Mortgage Interest Deduction Guide.