Claim Home Mortgage Interest Deduction – If you’re a US homeowner with a mortgage, claiming the home mortgage interest deduction can significantly lower your taxable income. This popular itemized deduction remains one of the most valuable tax benefits for millions of Americans in 2026 as you file your 2025 tax return. This guide explains exactly how to claim the home mortgage interest deduction using the latest IRS rules, eligibility requirements, debt limits, and step-by-step instructions.
What Is the Home Mortgage Interest Deduction?
The home mortgage interest deduction lets you deduct interest paid on a qualified home mortgage from your taxable income. You report it as an itemized deduction on Schedule A (Form 1040). The deduction applies only to interest on loans secured by your main home or a second home, and the loan proceeds must generally be used to buy, build, or substantially improve the home.
This deduction does not apply to personal interest or most home equity loans unless the funds improve the qualifying home. Lenders report the interest you paid on Form 1098, making it straightforward to claim when you file.
Who Qualifies to Claim the Home Mortgage Interest Deduction?
To claim the home mortgage interest deduction, you must meet these IRS requirements:
- You file Form 1040 or 1040-SR and itemize deductions on Schedule A (you cannot claim it with the standard deduction).
- You have an ownership interest in the home.
- The mortgage is a secured debt (recorded as a mortgage or deed of trust under state law).
- The home is a qualified home — either your main home or one second home.
- Both you and the lender intend that the loan will be repaid.
Home equity loan or line-of-credit interest qualifies only if you used the proceeds to buy, build, or substantially improve the home securing the loan. Interest on loans used for other purposes (like debt consolidation or vacations) is not deductible.
Mortgage Debt Limits for the 2025 Tax Year
The IRS caps the amount of debt on which you can deduct interest. These limits depend on when you incurred the debt:
- Loans taken out after December 15, 2017: You can deduct interest on up to $750,000 of mortgage debt ($375,000 if married filing separately).
- Loans taken out on or before December 15, 2017 (grandfathered debt): You can deduct interest on up to $1 million of mortgage debt ($500,000 if married filing separately).
The limits apply to the combined total of all qualifying mortgages on your main and second homes. If your total debt exceeds the limit, you must prorate the interest using the worksheet in IRS Publication 936.
Important update: The One Big Beautiful Bill Act (OBBBA), enacted July 4, 2025, made the $750,000 limit permanent. There is no reversion to the higher $1 million limit after 2025.
What Counts as Qualified Home Mortgage Interest?
Qualified interest includes:
- Interest on home acquisition debt (used to buy, build, or improve your home).
- Points paid to obtain the mortgage (fully deductible in the year paid if for your main home and other conditions are met).
- Prepayment penalties and late charges in some cases.
- Mortgage insurance premiums (PMI) — not deductible for 2025, but reinstated and treated as deductible mortgage interest starting in tax year 2026 under OBBBA (with income phaseouts).
Interest on reverse mortgages or loans not secured by a qualified home generally does not qualify.
Required Documentation: Form 1098 and More
Your mortgage lender must send you Form 1098 (Mortgage Interest Statement) by January 31, 2026, if you paid $600 or more in interest during 2025. Box 1 shows the interest paid, and Box 6 may show points or mortgage insurance premiums.
Keep these records:
- Form 1098
- Loan closing documents
- Records showing how you used loan proceeds (especially for home equity loans)
- Year-end mortgage statements
If your lender did not send Form 1098 or the amount is missing, you can still claim the deduction on Schedule A, line 8b, but you must provide supporting documentation.
Step-by-Step: How to Claim the Home Mortgage Interest Deduction on Your Tax Return?
Follow these steps to claim your deduction accurately:
- Gather your documents — Collect Form 1098 and any records for non-reported interest or points.
- Determine if you must use the worksheet — If your total mortgage debt exceeds the limit or you have mixed-use loans, complete the Worksheet to Figure Your Qualified Loan Limit and Deductible Home Mortgage Interest in IRS Publication 936.
- Complete Schedule A:
- Enter interest reported on Form 1098 on line 8a.
- Enter any additional qualified interest not on Form 1098 on line 8b.
- Enter deductible points not reported on Form 1098 on line 8c.
- Calculate the total — Add your mortgage interest to other itemized deductions and compare to the 2025 standard deduction ($15,750 for single filers or $31,500 for married filing jointly).
- File your return — E-file for faster processing, or mail if including paper forms.
Tax software like TurboTax or H&R Block automatically imports Form 1098 data and applies the limits for you.
Recent Tax Law Changes Affecting the Mortgage Interest Deduction
The One Big Beautiful Bill Act (OBBBA) of 2025 brought two major updates:
- Permanent $750,000 debt limit for post-2017 loans.
- PMI deduction returns in 2026 — Premiums paid on home acquisition debt will be treated as deductible mortgage interest starting with your 2026 tax return (filed in 2027), subject to AGI phaseouts.
Always check IRS.gov/OBBB for the latest guidance.
Common Mistakes to Avoid When Claiming the Deduction
- Claiming interest on debt over the limit without prorating.
- Deducting home equity interest not used for home improvements.
- Forgetting to reduce the deduction if you received a Mortgage Credit Certificate (Form 8396).
- Taking the deduction without itemizing (it only works if your total itemized deductions exceed the standard deduction).
- Missing Form 1098 — contact your lender early if it’s delayed.
Should You Itemize or Take the Standard Deduction in 2025?
For 2025, the standard deduction is $15,750 (single) or $31,500 (married filing jointly). Itemize only if your total deductions (mortgage interest + property taxes + charitable contributions + medical expenses, etc.) exceed this amount. Many homeowners with large mortgages and property taxes benefit from itemizing.
When to Consult a Tax Professional?
Tax situations involving multiple homes, refinances, rental properties, or high debt levels can get complex. A CPA or enrolled agent can help you maximize your deduction and avoid IRS issues. Free help is available through the IRS Volunteer Income Tax Assistance (VITA) program if you qualify.
Claiming the home mortgage interest deduction is straightforward when you follow IRS Publication 936 and keep good records. For the official rules, download Publication 936 directly from IRS.gov. Consult a tax advisor for personalized advice, and always use the most current forms when filing your 2025 return in 2026.