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.
Written by Wanyu T | Last reviewed: May 8, 2026
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 proration
- PMI prorated by the same debt-cap factor as mortgage interest (IRC §163(h)(4))
- PMI AGI phase-out
- 10% reduction per $1k AGI over $100k ($50k MFS); fully phases out at $110k/$60k
- Mixed loans
- Enter acquisition-debt portion separately; defaults to full balance if not provided
- 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 modeled at the IRC §163(h)(3)(E) thresholds ($100k/$50k MFS); verify final OBBB statutory text for any changes to these thresholds.
- 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
- May 2026AI audit: PMI now prorated by debt-cap proration factor; AGI phase-out for PMI implemented; mixed-loan acquisition-debt allocation corrected; schema hardened with .finite() guards.
- 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).