# My mortgage interest deduction?

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.

- Page: https://www.acalculator.org/finance/mortgage-interest-deduction-calculator
- JSON spec: https://www.acalculator.org/finance/mortgage-interest-deduction-calculator.json
- Version: cb36a941087e

## Default answer

Example with the default inputs (Mortgage interest paid $20,000.00, Average mortgage balance $400,000.00, Loan taken out After December 15, 2017, Filing status Single, Income $120,000.00, Other itemized deductions $12,000.00): Of $20,000.00 of mortgage interest, $20,000.00 is deductible, saving $3,492.00 of federal tax.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| interest | Mortgage interest paid | Interest on loans for your main home and one second home for the year (Form 1098 box 1). |
| balance | Average mortgage balance | The average balance over the year of all those loans (for example, the mean of the monthly balances). |
| taken | Loan taken out | Loans from before December 16, 2017 keep the older $1 million limit. |
| status | Filing status | Your federal filing status for the year. |
| income | Income | Your income for the year before deductions (AGI). |
| other | Other itemized deductions | State and local taxes (up to the cap), gifts to charity, and medical costs over 7.5% of AGI. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| deductible | Deductible mortgage interest | Interest you can itemize: all of it, or the share the debt limit allows. |
| saved | Federal tax it saves | Tax without the interest minus tax with it, taking the larger of the standard and itemized deduction. |
| limit | Debt limit | The most debt whose interest is deductible. |
| ratio | Share deductible | Debt limit ÷ average balance, rounded to three places, or 100% under the limit. |
| itemized | Itemized deductions | Deductible interest plus your other itemized deductions, less the IRC 68 cut at the top bracket. |
| standard | Standard deduction | Your 2026 standard deduction. |
| over | Itemizing beats the standard deduction by | Itemized deductions minus the standard deduction, or 0. |
| choice | Best choice | Itemize or take the standard deduction. |

## 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.

## Worked examples

1. interest = $20,000.00, balance = $400,000.00, taken = after, status = single, income = $120,000.00, other = $12,000.00 gives deductible = $20,000.00, saved = $3,492.00, over = $15,900.00. Source: IRS Publication 936: under the $750,000 limit all interest is deductible.
2. interest = $60,000.00, balance = $1,000,000.00, taken = after, status = mfj, income = $400,000.00, other = $40,000.00 gives deductible = $45,000.00, ratio = 75%. Source: IRS Publication 936 Table 1 lines 11 to 15: 750,000 ÷ 1,000,000 = 0.750.
3. interest = $48,000.00, balance = $1,200,000.00, taken = before, status = mfj, income = $400,000.00, other = $40,000.00 gives deductible = $39,984.00, limit = $1,000,000.00.
4. interest = $25,000.00, balance = $500,000.00, taken = after, status = mfs, income = $150,000.00, other = $5,000.00 gives deductible = $18,750.00, limit = $375,000.00.

## FAQ

### How much mortgage interest can I deduct?

Interest on up to $750,000 of home acquisition debt ($375,000 married filing separately) for loans taken out after December 15, 2017, or up to $1 million ($500,000) for older loans (IRS Publication 936). If your balance is over the limit, you deduct the share of interest the limit covers.

### Do I need to itemize to deduct mortgage interest?

Yes. Mortgage interest is an itemized deduction on Schedule A. It saves tax only when your itemized deductions add up to more than the standard deduction: $16,100 single, $32,200 married filing jointly, $24,150 head of household in 2026.

### How much tax does the deduction save?

Only the part of your itemized deductions above the standard deduction saves tax, at your top rate. For example, if itemizing beats the standard deduction by $10,000 and you are in the 22% bracket, you save about $2,200.

### What loans count?

Loans secured by your main home or one second home and used to buy, build, or substantially improve it. A home equity loan or line of credit counts only to the extent you used it to improve the home.

### How is the deductible share figured when the loan is over the limit?

Publication 936 Table 1 divides the limit by your average balance, rounds the result to three decimal places, and multiplies your interest by it. A $1 million average balance with $60,000 of interest gives 0.750 × 60,000 = $45,000.

### Why do older loans have a higher limit?

The 2017 tax law cut the limit from $1 million to $750,000 for debt taken out after December 15, 2017. Loans from before then keep the $1 million limit ($500,000 separately), as does a home bought before April 1, 2018 under a written binding contract made before December 15, 2017 to close before January 1, 2018 (Publication 936).

## 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)