Mortgage Interest Deduction Calculator: What You Can Actually Write Off
Published 06/10/2026 by
Ante Mazalin
Summary:
A mortgage interest deduction calculator shows how much of the mortgage interest you pay can be subtracted from your taxable income, if you itemize. Three things decide the answer.
- Interest paid: The total mortgage interest for the year, reported on Form 1098.
- The debt cap: Interest counts only up to a federal mortgage-balance limit.
- Itemizing: The deduction helps only if your itemized total beats the standard deduction.
The mortgage interest deduction is real money, but only for some homeowners. Whether it helps you at all comes down to a single comparison against the standard deduction.
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How the mortgage interest deduction works
You can deduct the interest paid on up to $750,000 of mortgage debt used to buy, build, or improve your home. The cap was made permanent for 2026 and beyond under the One Big Beautiful Bill Act.
The deduction is claimed on Schedule A, so it only lowers your taxes if you itemize instead of taking the standard deduction. For many homeowners, the standard deduction is now larger, which means the mortgage deduction does nothing for them.
The math: how much interest is deductible
Early in a loan, almost all of your payment is interest, so the deduction is largest in the first years. The table shows first-year interest on a 30-year loan at 6.5%.
| Loan balance | First-year interest | Deductible portion |
|---|---|---|
| $500,000 | $32,335 | All of it |
| $750,000 | $48,503 | All of it |
| $1,000,000 | $64,671 | 75% ($48,503) |
The $1,000,000 row shows the cap in action. With a balance above $750,000, you deduct only the fraction the cap covers, here 750 divided by 1,000, or 75% of the interest.
Loans taken before December 16, 2017 keep the older, higher $1 million cap, so the limit that applies depends on when you closed.
The part that decides everything: itemizing
The deduction only counts if your total itemized deductions exceed the standard deduction, which is $16,100 single and $32,200 married filing jointly for 2026.
A married couple paying $20,000 in mortgage interest needs only about $12,000 more in other itemized deductions, like state taxes and charitable gifts, to clear the standard deduction and start benefiting.
How to estimate your deduction
Four steps tell you whether the deduction helps and by how much.
- Find your total mortgage interest for the year on Form 1098, box 1.
- If your loan balance exceeds $750,000, multiply the interest by $750,000 divided by your average balance.
- Add that interest to your other itemized deductions: state and local taxes (capped), charitable gifts, and the like.
- Compare the total to your standard deduction. Itemize only if the total is larger; the benefit is the difference times your tax rate.
Pro Tip: For 2026, private mortgage insurance premiums are deductible as mortgage interest under the One Big Beautiful Bill Act. If you pay PMI, include those premiums alongside your loan interest when you tally the deduction, which can be enough to push some homeowners over the standard deduction threshold.
What counts and what doesn’t
- Counts: Interest on a mortgage to buy, build, or substantially improve your main or second home, up to the $750,000 combined cap.
- Counts: Points paid on a purchase, and PMI premiums for 2026.
- Does not count: Principal payments, homeowners insurance, or HOA dues.
- Limited: Home equity loan interest, deductible only if the funds went toward improving the home that secures the loan.
When the deduction is worth chasing, and when it isn’t
It matters most for homeowners early in a large mortgage in a high-tax state, where mortgage interest plus state taxes easily clears the standard deduction.
It often does nothing for homeowners with small loans, those late in their loan when interest is low, or anyone whose itemized total falls short of the standard deduction. In those cases, taking the standard deduction is simply the better deal.
Key takeaways
- You can deduct interest on up to $750,000 of mortgage debt, a cap made permanent for 2026.
- Above that balance, only the fraction the cap covers is deductible. A $1,000,000 loan deducts 75% of its interest.
- The deduction only helps if you itemize and beat the standard deduction ($16,100 single, $32,200 married filing jointly).
- PMI premiums are deductible as mortgage interest for 2026.
- The deduction is largest early in the loan, when nearly every payment is interest.
FAQ
How much mortgage interest can I deduct in 2026?
Interest on up to $750,000 of mortgage debt ($375,000 if married filing separately). Loans taken before December 16, 2017 keep the older $1 million cap. You must itemize to claim it.
Is mortgage interest still deductible if I take the standard deduction?
No. The mortgage interest deduction is an itemized deduction. If your itemized total is less than the standard deduction, you take the standard deduction and the mortgage interest provides no separate benefit.
How do I know if itemizing is worth it?
Add your mortgage interest to your other itemized deductions and compare the total to the standard deduction. Itemize only if the total is higher; the benefit equals the difference multiplied by your marginal tax rate.
Can I deduct interest on a second home?
Yes, but the $750,000 cap applies to the combined balance of your main home and second home, not to each separately.
Is PMI deductible in 2026?
Yes. Under the One Big Beautiful Bill Act, private mortgage insurance premiums are deductible as mortgage interest for the 2026 tax year, provided you itemize.
Does refinancing change my deduction?
Refinanced debt keeps the cap that applied to the original loan, up to the balance at the time of refinancing. Cash taken out and not used to improve the home generally does not qualify.
The deduction is one piece of what a mortgage really costs after taxes. Sense AI, the AI assistant in the SuperMoney app, can help you see whether itemizing beats the standard deduction in your situation.
If you are weighing whether to buy down your rate, the deductibility of points matters too; the mortgage points calculator covers the break-even and tax treatment. And once you start prepaying, the mortgage payoff calculator shows how a smaller balance shrinks both your interest and this deduction over time.
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