Are Mortgage Payments Tax Deductible?

Updated for tax year 2025.

If you’re a homeowner and a taxpayer, you’ve probably heard about the mortgage interest deduction and other homeowner-related deductions. But exactly how much of your monthly mortgage payment is tax-deductible, according to the IRS?

The short answer is more than you might think, but maybe not as much as you might hope. Here’s a breakdown.

At a glance:

You can write off certain parts of your mortgage payment, like interest and property taxes, but not your entire mortgage payment.

The deductions discussed below are typically only available as itemized deductions.

As a homeowner, how much of my mortgage payment can I write off when filing my tax return?

Depending on how your mortgage is set up, your monthly payment likely includes more than just your house payment, such as principal, interest, taxes, and insurance (also known as PITI). Let’s look at each of these categories to see whether there’s a deduction that can lower your taxable income.

Principal: no

The principal is the total amount you borrow from the lender. Unfortunately, your principal is not deductible. The portion of your house payment that goes toward the principal is generally smaller during the first years of the mortgage term but increases as the term progresses. This is because you pay more interest in the first years of the mortgage term. Over time, you will pay less interest and more in principal as your loan amount decreases.

Interest: yes

Mortgage interest payments are deductible, but only if you itemize your deductions. The IRS has different limits on how much interest you can write off for a mortgage loan, depending on when you took out the loan. You can deduct mortgage interest paid on up to $1 million for loans taken out on or before Dec. 15, 2017, or up to $750,000 for loans taken out after that date.

IRS Publication 530, Tax Information for Homeowners, has some great information about the home mortgage interest deduction. For the interest to qualify for a tax deduction, it needs to be on a loan secured by either your main home (primary residence) or second home.

At tax time, your mortgage lender will send you a statement, Form 1098, if you paid $600 or more of mortgage interest. This form outlines how much you paid in principal and interest. You should report that information on your tax return.

Home equity loan interest: no

Unfortunately, you cannot deduct the interest on a loan secured by your home now, unless the funds were used to buy, construct, or make significant improvements to your home.

Real estate taxes: yes

Property taxes you pay on your home and the land it sits on may be deductible if you itemize your deductions. This includes property taxes paid directly to your county or city, as well as amounts paid through escrow. If you bought your home during the tax year, your closing disclosure may show deductible property taxes you paid at closing.

Property taxes are part of the SALT (state and local tax) deduction, which limits how much you can deduct for combined state and local income taxes and property taxes. SALT limits changed for tax year 2025, so the amount you can deduct may be higher than in prior years. For a full breakdown, see our guide to the SALT deduction.

If your lender paid property taxes from your escrow account, the amount may also be reported on Form 1098, but you can also use your county/city records or escrow statements to confirm what you actually paid. You’ll report deductible property taxes on Schedule A (Form 1040).

Insurance: no

Homeowners insurance protects your house and its contents from fire, wind, and other specified perils. Your mortgage company requires you to purchase coverage, but the premiums — often bundled into your monthly mortgage payment — are not deductible.

Title insurance is a policy that guarantees the title for a piece of property is valid. Your lender often requires it, but it is also not deductible.

Private mortgage insurance (PMI)

Most lenders require PMI when a buyer cannot make a down payment of at least 20% of the home purchase price. This coverage protects the lender in case you default on the loan. Whether or not it is deductible depends on the tax year in question:

Tax year 2025: Mortgage insurance premiums (including PMI) are not deductible for most taxpayers.

Tax year 2026 and later: The Working Families Tax Cut Act (a.k.a. the One Big Beautiful Bill or OBBB) allows certain mortgage insurance premiums to once again be included as part of the itemized home mortgage interest deduction (rules and limits apply).

Outlook for coming tax years

Tax year 2025: Mortgage interest rules generally continue as they were in 2024, but the SALT cap increased, which may affect how much property tax you can deduct if you itemize.

Tax year 2026 and beyond: The OBBB made the $750,000 mortgage interest debt limit permanent, so it won’t automatically revert after 2025 as planned.

Tax year 2026 and beyond: PMI may be deductible again for itemizers under new tax law.

Claim homeowner tax deductions with TaxAct®.

As a homeowner, you can benefit from tax deductions on mortgage interest and property taxes, but there are limitations, and you must itemize to take advantage of these tax benefits. It usually only makes sense to itemize if your itemized deductions outweigh your standard deduction.

Thankfully, it’s easy to claim either type of tax deduction when you file with us at TaxAct. As you input your information, we’ll do the calculations behind the scenes and let you know which method would be more beneficial to you — claiming the standard deduction or itemizing your deductions.

This article is for informational purposes only and not legal or financial advice.

All TaxAct offers, products and services are subject to applicable terms and conditions.

The OBBB is now also being referred to by lawmakers as the Working Families Tax Cut Act. You may see one or both names used here, but they refer to the same set of tax changes.