The mortgage-interest deduction still exists, but after 2017 far fewer borrowers claim it. The Tax Cuts and Jobs Act nearly doubled the standard deduction—$14,600 for single filers and $29,200 for married couples filing jointly in 2024—so unless your itemized deductions exceed that threshold, you take the standard deduction and skip itemizing entirely. Many households find their mortgage interest alone doesn't clear the bar.
Acquisition-debt limit and deductibility
You can deduct interest paid on up to $750,000 of acquisition debt—the amount you borrowed to buy, build, or substantially improve your main home or a second home. Loans originated before December 16, 2017 remain grandfathered under the old $1 million cap. Home-equity debt used for other purposes—cars, tuition, credit-card payoff—is no longer deductible. The IRS cares what you spent the proceeds on, not what you called the loan.
Itemizing in practice
To make itemizing worthwhile, your total Schedule A deductions—mortgage interest, state and local taxes (capped at $10,000), charitable gifts, and medical expenses above 7.5% of adjusted gross income—must beat the standard deduction. A married couple paying $18,000 in mortgage interest and maxing out the SALT cap sits at $28,000 in deductions, still $1,200 shy of the standard figure. Add another few thousand in documented charity and you cross the threshold. Without mortgage interest or large charitable contributions, most filers take the standard deduction.
Form 1098 and discount points
Your lender mails Form 1098, Mortgage Interest Statement, by January 31. Box 1 reports the interest you paid during the calendar year; that's the figure you carry to Schedule A if you itemize. Box 2 may show points—prepaid interest charged to lower your note rate—which are generally deductible in the year you pay them on a purchase-money loan for your primary residence. Points on a refinance are amortized over the loan term. These figures are illustrative; rates and products are subject to change and this is not a commitment to lend.
The Alliance take
We see clients surprised each April that their mortgage interest delivered no tax benefit because they took the standard deduction anyway. Run the numbers with your CPA before closing: a $400,000 loan at 7.0 percent generates roughly $28,000 in first-year interest, enough to help a married couple itemize if they also have SALT and charity. A $200,000 loan at the same rate yields $14,000—not enough on its own. Consult a CPA or attorney; this is not tax or legal advice.
Understanding the deduction helps you model the true after-tax cost of homeownership. If you're ready to compare loan scenarios and see how the numbers work for your situation, start an application and we'll walk through the details.