Mortgage Interest Deduction


Mortgage Interest Deduction allows homeowners to reduce their taxable income by deducting the amount paid in mortgage interest. This is a remarkably effective tool that facilitates homeownership.  

Mortgage Interest Deduction provisions from the recently passed federal tax legislation

  • The final bill reduces the limit on deductible mortgage debt to $750,000 for new loans taken out after 12/14/2017. Current loans of up to $1 million are grandfathered and are not subject to the new $750,000 cap. Neither limit is indexed for inflation.
  • Homeowners may refinance mortgage debts existing on 12/14/2017 up to $1 million and still deduct the interest, so long as the new loan does not exceed the amount of the mortgage being refinanced.
  • The final bill repeals the deduction for interest paid on home equity debt through 12/31/2025. Interest is still deductible on home equity loans (or second mortgages) if the proceeds are used to substantially improve the residence.
  • Interest remains deductible on second homes, but subject to the $1 million / $750,000 limits.


We've already done the research for you. References (formerly Field Guides) offer links to articles, eBooks, websites, statistics, and more to provide a comprehensive overview of perspectives. EBSCO articles (E) are available only to NAR members and require a password.

MID Basics

For a list of states that have a mortgage interest deduction, please see the Short Answer Table - Mortgage Interest 2018 Deductions, (State Issues Tracker, National Association of REALTORS®) (Note: username and password is required).

Mortgages Taxes in 2018: What You Need to Know, (The Motley Fool, Mar. 10, 2018)

Map: Mortgage Interest Deductions, (Brookings Institution, Dec. 5, 2014)

Mortgage Interest Deduction topic page, (National Association of REALTORS®)

How Does the MID Benefit Housing and Homeownership?

Interest on Home Equity Loans Often Still Deductible Under New Law, (Internal Revenue Service, Feb. 21, 2018)

How the New Tax Law Will Impact Your Housing Costs, (Forbes, Jan. 9, 2018)

REALTORS® Will Fight for the Mortgage Interest Deduction, (National Association of REALTORS®, Oct. 13, 2017)

Does America’s Housing Policy Need a Reset? (Pacific Standard, Mar. 2, 2017)

Why We Can't Compromise on the Mortgage Interest Deduction, (National Association of REALTORS®, n.d.)

Why Is There Opposition to the MID?

It's time for the mortgage interest deduction to go, (Slate, Apr. 27, 2018)

The GOP Targets America's Most Loved and Hated Tax Break, (The Atlantic, Nov. 2, 2017)

Is Mortgage Interest Deduction the Best Way?, (Wall Street Journal, May 14, 2017)

Defending the indefensible mortgage interest deduction, (Regulation, Winter 2016-2017) E

Fixing the most expensive tax deduction, (The Washington Post, Nov. 29, 2015)

Why the mortgage interest tax deduction should disappear, but won't, (Money & Banking, June 8, 2015)

A senseless subsidy, (The Economist, May 16, 2015)

The Uselessness of the Mortgage Interest Deduction, (The New York Times Opinion Pages, Apr. 14, 2015)

The Tax Deductions Economists Hate, (FiveThirtyEight Economics, Apr. 3, 2015)

The Mortgage Mistake, (The New Yorker, Jan. 12, 2015)

Rules, Forms, & G​uidelines from the IRS

Home Mortgage Interest Deduction: Publication 936 (for use in preparing 2017 returns), (Internal Revenue Service)

The New Tax Law: The Mortgage Interest Deduction, (Wall Street Journal, Feb. 13, 2018)

Topic 504—Home Mortgage Points, (, Dec. 30, 2016)

Equitable Ownership and Mortgage Interest Deductions, (The Tax Adviser, Jan. 2012) E

The IRS, MID​ and You

NAR Issue Brief Tax Reform 2017 Talking Points, (National Association of REALTORS®, 2017)

The Mortgage Interest Deduction: Revenue and Distributional Effects, (Tax Policy Center, Aug. 24, 2018)

5 Big Rule Changes for Individuals in the New Tax Bill, (Investors Business Daily, Dec. 29, 2017) E

Breaking Down the Concept Behind the Mortgage Interest Deduction, (NPR, Nov. 8, 2017) E

Testimony of Gary Thomas, 2013 President National Association of REALTORS®, Before the United States House of Representatives (Committee on Ways and Means Hearing Titled Tax Reform and Residential Real Estate, Apr. 25, 2013)

NAR Issue Summary: Federal Tax/Mortgage Interest Deduction, (National Association of REALTORS®)

eBooks & Other Resources

The following eBooks and digital audiobooks are available to NAR members:

How to Invest in Real Estate & Pay Little or No Taxes (eBook)

J.K. Lasser's Your Income Tax 2017 (eBook)

The Home Mortgage Book (eBook)

The Mortgage Answer Book: Practical Answers to More Than 150 of Your Mortgage and Loan Questions (eBook)

The Mortgage Encyclopedia: The Authoritative Guide to Mortgage Programs, Practices, Prices and Pitfalls (eBook)

The Tax Lady's Guide to Beating the IRS and Saving Big Bucks on Your Taxes (eBook)

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The inclusion of links on this page does not imply endorsement by the National Association of REALTORS®. NAR makes no representations about whether the content of any external sites which may be linked in this page complies with state or federal laws or regulations or with applicable NAR policies. These links are provided for your convenience only and you rely on them at your own risk.


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