For the 2025 tax year, homeowners who itemize deductions can deduct interest paid on up to $750,000 of mortgage debt ($375,000 if married filing separately).
This limit, which applies to combined debt on a primary and second home, was made permanent by recent legislation and was not allowed to revert to the previous $1 million cap as originally planned.
Details of the 2025 Mortgage Interest Tax Deduction
Itemizing is Required: You must choose to itemize deductions on your federal tax return (using IRS Form 1040 Schedule A) instead of taking the standard deduction to claim the mortgage interest deduction.
Standard Deduction Amounts: For tax year 2025, the standard deductions are $15,750 (Single or Married Filing Separately), $31,500 (Married Filing Jointly), and $23,625 (Head of Household). You should itemize only if your total itemized deductions (including mortgage interest, state and local taxes, and charitable contributions) exceed your applicable standard deduction.
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Mortgage Loan Limits
- For mortgages taken out on or after December 16, 2017, the interest on up to $750,000 of debt ($375,000 if married filing separately) is deductible.
- For older mortgages (incurred before December 16, 2017), the previous, higher limit of $1 million ($500,000 if married filing separately) applies (these are “grandfathered”).
Qualified Homes: The deduction applies to interest on debt used to buy, build, or substantially improve your main home or a second home that is used for personal purposes.
HELOCs and Home Equity Loans: Interest on home equity lines of credit (HELOCs) or home equity loans is only deductible if the funds are used to buy, build, or substantially improve the home securing the loan. Interest used for personal expenses (like credit card debt or a vacation) is not deductible for the 2018-2025 tax years.
Form 1098: Your mortgage lender or servicer will provide you with a Form 1098 in early January or February, which states the total amount of mortgage interest you paid during the previous year.
PMI: The deduction for Private Mortgage Insurance (PMI) premiums expired and cannot be claimed for the 2025 tax year.
Electronic Filing Recommendation
Filing electronically is strongly recommended when claiming the mortgage interest deduction:
Accuracy: Tax software automatically pulls in Form 1098 data and calculates deductions correctly
Speed: E-filing speeds up processing and allows faster refunds if owed
Error Prevention: Built-in checks help ensure you do not exceed debt limits or incorrectly claim HELOC interest
Confirmation: Electronic filing provides instant confirmation that your return was received by the IRS
Most popular tax software also provides guidance on whether itemizing is more beneficial than taking the standard deduction, which is especially useful for homeowners with multiple deductions.
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