{
  "id": "mortgage-interest-deduction",
  "version": "cb36a941087e",
  "status": "published",
  "name": "Mortgage Interest Deduction Calculator",
  "question": "My mortgage interest deduction?",
  "summary": "Works out how much of your 2026 home mortgage interest is deductible under the $750,000 (or $1 million) debt limit, and how much federal tax it saves over the standard deduction.",
  "category": "finance",
  "subcategory": "tax-and-pay",
  "url": "https://www.acalculator.org/finance/mortgage-interest-deduction-calculator",
  "markdown": "https://www.acalculator.org/finance/mortgage-interest-deduction-calculator.md",
  "kind": "function",
  "method": "Limit = $750,000 for debt taken out after December 15, 2017, $1,000,000 for older debt (half each when married filing separately). If the average balance is over the limit, deductible interest = interest × (limit ÷ balance, rounded to three places); otherwise all of it. Tax saved = Form 1040 tax with your other itemized deductions − tax with them plus the deductible interest, each taking the larger of the standard and itemized deduction.",
  "assumptions": [
    "An estimate for tax year 2026 (IRS Publication 936, Rev. Proc. 2025-32), not tax advice.",
    "All the debt was used to buy, build, or substantially improve the home; interest on home equity debt used for anything else is not deductible. Points and mortgage insurance premiums are not included.",
    "Income is ordinary income with no credits; your other itemized deductions are already within their own limits."
  ],
  "inputs": {
    "$schema": "https://json-schema.org/draft/2020-12/schema",
    "type": "object",
    "properties": {
      "interest": {
        "title": "Mortgage interest paid",
        "description": "Interest on loans for your main home and one second home for the year (Form 1098 box 1).",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 100000000
      },
      "balance": {
        "title": "Average mortgage balance",
        "description": "The average balance over the year of all those loans (for example, the mean of the monthly balances).",
        "type": "number",
        "x-unit": "USD",
        "exclusiveMinimum": 0,
        "maximum": 1000000000
      },
      "taken": {
        "title": "Loan taken out",
        "description": "Loans from before December 16, 2017 keep the older $1 million limit.",
        "type": "string",
        "enum": [
          "after",
          "before"
        ]
      },
      "status": {
        "title": "Filing status",
        "description": "Your federal filing status for the year.",
        "type": "string",
        "enum": [
          "single",
          "mfj",
          "mfs",
          "hoh",
          "qss"
        ]
      },
      "income": {
        "title": "Income",
        "description": "Your income for the year before deductions (AGI).",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000
      },
      "other": {
        "title": "Other itemized deductions",
        "description": "State and local taxes (up to the cap), gifts to charity, and medical costs over 7.5% of AGI.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000
      }
    }
  },
  "outputs": {
    "deductible": {
      "label": "Deductible mortgage interest",
      "description": "Interest you can itemize: all of it, or the share the debt limit allows.",
      "format": "money"
    },
    "saved": {
      "label": "Federal tax it saves",
      "description": "Tax without the interest minus tax with it, taking the larger of the standard and itemized deduction.",
      "format": "money"
    },
    "limit": {
      "label": "Debt limit",
      "description": "The most debt whose interest is deductible.",
      "format": "money"
    },
    "ratio": {
      "label": "Share deductible",
      "description": "Debt limit ÷ average balance, rounded to three places, or 100% under the limit.",
      "format": "percent"
    },
    "itemized": {
      "label": "Itemized deductions",
      "description": "Deductible interest plus your other itemized deductions, less the IRC 68 cut at the top bracket.",
      "format": "money"
    },
    "standard": {
      "label": "Standard deduction",
      "description": "Your 2026 standard deduction.",
      "format": "money"
    },
    "over": {
      "label": "Itemizing beats the standard deduction by",
      "description": "Itemized deductions minus the standard deduction, or 0.",
      "format": "money"
    },
    "choice": {
      "label": "Best choice",
      "description": "Itemize or take the standard deduction.",
      "format": "text"
    }
  },
  "defaultAnswer": {
    "inputs": {
      "interest": 20000,
      "balance": 400000,
      "taken": "after",
      "status": "single",
      "income": 120000,
      "other": 12000
    },
    "outputs": {
      "deductible": 20000,
      "saved": 3492,
      "limit": 750000,
      "ratio": 100,
      "itemized": 32000,
      "standard": 16100,
      "over": 15900,
      "choice": "Itemize"
    },
    "text": "Of $20,000.00 of mortgage interest, $20,000.00 is deductible, saving $3,492.00 of federal tax."
  },
  "examples": [
    {
      "given": {
        "interest": 20000,
        "balance": 400000,
        "taken": "after",
        "status": "single",
        "income": 120000,
        "other": 12000
      },
      "expect": {
        "deductible": 20000,
        "saved": 3492,
        "over": 15900
      },
      "source": "IRS Publication 936: under the $750,000 limit all interest is deductible; rate schedule $103,900 gives $17,570, Tax Table $88,000 gives $14,078; Python 3 check in docs/progress/WP-112/check.py"
    },
    {
      "given": {
        "interest": 60000,
        "balance": 1000000,
        "taken": "after",
        "status": "mfj",
        "income": 400000,
        "other": 40000
      },
      "expect": {
        "deductible": 45000,
        "ratio": 75
      },
      "source": "IRS Publication 936 Table 1 lines 11 to 15: 750,000 ÷ 1,000,000 = 0.750; 0.750 × 60,000; Python 3 check in docs/progress/WP-112/check.py"
    },
    {
      "given": {
        "interest": 48000,
        "balance": 1200000,
        "taken": "before",
        "status": "mfj",
        "income": 400000,
        "other": 40000
      },
      "expect": {
        "deductible": 39984,
        "limit": 1000000
      },
      "source": "Pub 936 Table 1: grandfathered debt, 1,000,000 ÷ 1,200,000 = 0.8333, rounded to 0.833; 0.833 × 48,000; Python 3 check in docs/progress/WP-112/check.py"
    },
    {
      "given": {
        "interest": 25000,
        "balance": 500000,
        "taken": "after",
        "status": "mfs",
        "income": 150000,
        "other": 5000
      },
      "expect": {
        "deductible": 18750,
        "limit": 375000
      },
      "source": "Pub 936: $375,000 limit married filing separately; 0.750 × 25,000; Python 3 check in docs/progress/WP-112/check.py"
    }
  ],
  "sources": [
    "IRS, Publication 936, Home Mortgage Interest Deduction: Part II limits and Table 1. https://www.irs.gov/publications/p936 (retrieved 2026-10-05)",
    "IRS, Topic no. 505, Interest expense. https://www.irs.gov/taxtopics/tc505 (retrieved 2026-10-05)",
    "IRS, Rev. Proc. 2025-32 (Internal Revenue Bulletin 2025-45), sections 4.01 and 4.14. https://www.irs.gov/irb/2025-45_IRB (retrieved 2026-10-05)"
  ],
  "related": [
    "mortgage",
    "income-tax",
    "taxable-income",
    "rent-vs-buy"
  ],
  "changelog": []
}