Freedom Mortgage Tax Deduction Guide – If you have a mortgage with Freedom Mortgage, you could be missing out on thousands of dollars in federal tax savings. This comprehensive Freedom Mortgage tax deduction guide explains exactly how USA homeowners can claim mortgage interest, property taxes, points, and other benefits when filing taxes in 2026 (for tax year 2025) and beyond. All information is based on current IRS rules and recent tax law updates from the One Big Beautiful Bill Act (OBBBA).
Whether you’re a first-time buyer or a seasoned homeowner, understanding these deductions helps lower your taxable income and puts more money back in your pocket. Freedom Mortgage makes it easy by providing your Form 1098 Mortgage Interest Statement each year.
What Is the Mortgage Interest Tax Deduction?
The mortgage interest tax deduction lets you reduce your taxable income by the amount of interest you paid on your home loan during the tax year. You claim it as an itemized deduction on Schedule A (Form 1040).
To qualify:
- The loan must be secured by your main home or a second home (qualified residence).
- You must have an ownership interest in the home.
- You must itemize deductions instead of taking the standard deduction.
For tax year 2025, the standard deduction is $15,750 (single or married filing separately), $31,500 (married filing jointly), or $23,625 (head of household). Many Freedom Mortgage borrowers find that itemizing saves more once mortgage interest and property taxes are included.
Who Qualifies for Mortgage Tax Deductions with Freedom Mortgage?
Freedom Mortgage borrowers qualify for the same IRS rules as anyone else. You can deduct home mortgage interest if:
- The debt is home acquisition debt (used to buy, build, or substantially improve your qualified home).
- You itemize on Schedule A.
- Your loan meets the debt limits (detailed below).
Freedom Mortgage customers automatically receive a Form 1098 showing the exact interest paid, making claiming the deduction straightforward.
Home equity loans or HELOCs qualify only if proceeds were used to buy, build, or substantially improve the home that secures the loan.
Current Mortgage Interest Deduction Limits for 2025 and 2026 Tax Years
The limits depend on when you took out the mortgage:
| Mortgage Origination Date | Debt Limit (Single) | Debt Limit (Married Filing Jointly) | Applies To |
|---|---|---|---|
| On or before Oct. 13, 1987 (grandfathered) | No limit | No limit | All interest |
| Oct. 14, 1987 – Dec. 15, 2017 | $1 million | $1 million | Acquisition debt |
| After Dec. 15, 2017 | $750,000 | $750,000 | Acquisition debt (permanent under OBBBA) |
The $750,000 limit is now permanent thanks to the One Big Beautiful Bill Act. If your total mortgage debt exceeds the limit, you can still deduct a portion of the interest.
How Freedom Mortgage Helps: Your Form 1098 Mortgage Interest Statement?
Freedom Mortgage sends your Form 1098 by January 31 each year (or you can download it anytime from your online account). Box 1 shows mortgage interest paid, Box 2 shows points, and other boxes may include mortgage insurance premiums and property taxes paid from escrow.
Pro tip from Freedom Mortgage: Log in to your account early in tax season to access your 1098 instantly—no waiting for the mail.
Deducting Property Taxes: The Updated SALT Deduction
Property taxes paid on your Freedom Mortgage home are deductible as part of the State and Local Tax (SALT) deduction. The OBBBA raised the SALT cap significantly:
- Tax year 2025: Up to $40,000
- Tax year 2026: Up to $40,400 (indexed for inflation)
This cap applies to the combined total of state/local income taxes (or sales taxes) + real estate taxes. High-tax states benefit the most.
If your Freedom Mortgage escrow statement shows property taxes paid, include them on Schedule A.
Can You Deduct Mortgage Points and Private Mortgage Insurance (PMI)?
Mortgage points (prepaid interest): You can often deduct the full amount in the year paid if they meet IRS tests (e.g., paid for a purchase loan and stated as points on settlement statement). Otherwise, spread them over the loan term.
Private Mortgage Insurance (PMI): Not deductible for 2025 taxes, but permanently reinstated starting tax year 2026. PMI premiums will be treated as deductible mortgage interest for contracts issued after 2006. Great news for Freedom Mortgage borrowers who put down less than 20%.
Home Equity Loans and HELOC Tax Deductions Explained
Interest on HELOCs or home equity loans is deductible only if the funds were used to buy, build, or substantially improve your home. The same $750,000 overall debt limit applies (combined with your primary mortgage).
Freedom Mortgage offers competitive HELOC options—contact them to see how using proceeds for home improvements can create additional tax savings.
Step-by-Step Guide to Claiming Your Deductions on Your Tax Return
- Gather documents: Freedom Mortgage Form 1098, property tax statements, and settlement statements for points.
- Decide to itemize: Compare total itemized deductions vs. standard deduction.
- Complete Schedule A: Report mortgage interest (line 8a/8b), points, and property taxes.
- Use IRS worksheets (in Publication 936) if your debt exceeds limits.
- File electronically for faster refunds—Freedom Mortgage 1098 data imports easily into TurboTax, H&R Block, etc.
- Keep records for at least 3 years.
Common Pitfalls to Avoid When Claiming Freedom Mortgage Tax Deductions
- Forgetting to itemize when it saves more than the standard deduction.
- Deducting interest on loans not used for home purchase/improvement.
- Missing out on PMI deduction starting in 2026.
- Not allocating interest correctly on mixed-use loans.
- Overlooking second homes or vacation properties that qualify.
Always double-check with a tax professional—rules can be complex.
Additional Homeowner Tax Benefits Beyond the Mortgage
- Energy-efficient home improvements (credits via Form 5695).
- Selling your home (up to $250,000/$500,000 capital gains exclusion).
- Home office deduction (if self-employed).
Freedom Mortgage’s learning center has free resources on these topics.
Frequently Asked Questions About Freedom Mortgage Tax Deductions
Does Freedom Mortgage report my mortgage interest to the IRS?
Yes—via Form 1098 if interest is $600 or more.
Can I deduct my entire mortgage payment?
No, only the interest portion (and qualifying points/PMI in 2026+).
What if I refinanced with Freedom Mortgage?
New debt limits apply based on the refinance date and use of proceeds.
When will my 2025 Form 1098 be available?
By January 31, 2026—download it anytime from your Freedom Mortgage account.
Should I itemize or take the standard deduction?
Run the numbers. With the higher SALT cap and permanent $750,000 mortgage limit, most Freedom Mortgage homeowners with loans over ~$300,000 benefit from itemizing.
Ready to Maximize Your Freedom Mortgage Tax Savings?
Understanding the Freedom Mortgage tax deduction guide can save you hundreds or even thousands every year. Log into your Freedom Mortgage account today to download your latest 1098 and start planning for tax season.
This guide is for informational purposes only and is not tax or financial advice. Tax laws can change, and your situation may differ. Consult a qualified tax professional or visit IRS.gov/Publication 936 for the latest official rules.
For personalized mortgage options that align with strong tax benefits, visit Freedom Mortgage or call their team. Homeownership just got even more rewarding.