Mortgage Interest Deduction Calculator
Estimate your 2026 deductible mortgage interest under the OBBB-permanent $750,000 acquisition debt cap. Includes PMI deductibility and shows whether itemizing beats your standard deduction.
The mortgage interest deduction allows homeowners who itemize to deduct interest paid on qualifying acquisition debt — up to $750,000 of principal. OBBB §70108 permanently extended this cap (it was scheduled to revert to $1,000,000 after 2025 under the original TCJA sunset). If your loan balance exceeds $750,000, only the prorated share is deductible: deductible interest = total interest × ($750,000 / average loan balance).
The PMI (private mortgage insurance) deduction was also made permanent by OBBB §70108 for acquisition loans. The deduction phases out above $100,000 AGI ($50,000 MFS) per IRC §163(h)(3)(E). You must itemize to claim either deduction.
Worked example: $800,000 loan, $52,000 interest paid, 20-year term. Prorated deductible = $52,000 × ($750,000 / $800,000) = $48,750. At 24% bracket, federal tax savings ≈ $11,700 — but only if total itemized deductions exceed $32,200 (MFJ 2026 standard deduction per Rev. Proc. 2025-32).
How to use this calculator
- Enter your average mortgage balance and total interest paid during the year.
- Select loan origination date (pre- or post-Dec 15, 2017) to determine the applicable cap.
- Enter PMI paid if applicable for the deductible amount.
- Add other itemized deductions to compare against the standard deduction.
Formula and assumptions
cap = $750,000 (post-12/15/2017) or $1,000,000 (pre-12/16/2017) MFS cap = cap / 2 prorationFactor = min(1, cap / averageBalance) deductibleInterest = interestPaid * prorationFactor deductiblePMI = pmiPaid (if acquisition loan, subject to phase-out) totalMortgageDeduction = deductibleInterest + deductiblePMI itemizedTotal = totalMortgageDeduction + SALT + charitable + medical
- $750K cap
- OBBB §70108 — TCJA cap made permanent
- PMI
- Deductible on acquisition debt (OBBB permanent)
- AGI phase-out
- PMI phase-out not modeled (simplified)
- State deduction
- Not included — many states don't conform
Worked example
$600,000 balance, $38,000 interest paid, no PMI, post-2017 loan
Limitations
- PMI AGI phase-out thresholds not fully modeled.
- Home equity loan interest only deductible if used for acquisition/improvement — not modeled here.
- Refinanced loans may inherit pre-2018 grandfathered cap — consult a tax professional for refinance situations.
- State mortgage interest deduction conformity varies — not included.
- Educational estimate only — not professional tax advice.
Frequently asked questions
In 2026, mortgage interest on up to $750,000 of acquisition debt is deductible (OBBB §70108 made permanent). If your balance exceeds the cap, only a prorated share is deductible. PMI on acquisition loans is also deductible. Itemizing must exceed the $16,100/$32,200 standard deduction to benefit.
Recent updates
- Feb 2026OBBB §70108 permanently extended $750K cap; PMI deductibility made permanent. Updated calculator notes.
- Jul 2025Calculator updated on OBBB enactment; removed prior TCJA sunset caveat on $750K cap.
- Nov 2024Initial launch with 2025 figures (TCJA §163(h)(3), subject to possible 2026 revert to $1M).