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Categories: General Tax Terms

Mortgage Interest Deduction

The Mortgage Interest Deduction is a tax deduction available to homeowners that allows them to deduct interest paid on a mortgage for their primary residence or a second home from their taxable income. This deduction applies to interest on loans secured by the property, which can include first mortgages, second mortgages, home equity loans, and home equity lines of credit (HELOCs).

For example, if a homeowner pays $10,000 in mortgage interest during the tax year, they can reduce their taxable income by that amount, potentially lowering their overall tax liability. However, there are limits on the amount of mortgage debt that qualifies for this deduction, and changes in tax law may affect eligibility and the amount deductible.

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