valuation
mortgage interest deduction
The mortgage interest deduction is a federal income tax benefit that lets homeowners who itemize deduct interest paid on qualified loans used to buy, build, or improve a main or second home, subject to loan amount limits set by tax law. Principal payments are not deductible. Property taxes may also be deductible within limits. Tax rules change, so buyers should consult a tax professional.
- Exam tip
- Only interest (and qualifying points) is deductible, not principal, and only if the taxpayer itemizes. Licensees should refer tax questions to tax professionals.
- Example
- A homeowner pays $14,000 in mortgage interest and $4,000 in principal this year. Only the $14,000 of interest may be deductible if she itemizes.
Related terms & state variants
Sources
Source verification pending. Confirm current requirements with your state regulator.
Last verified: 2026-10-23