If you are a homeowner, you likely qualify for one or more mortgage interest tax deductions. In this post, we’ll share the basic framework to determine if you could lower your tax burden by writing off the interest on your mortgage for your primary residence.

Note: This article is for information only and is subject to change, it’s always best to consult a tax professional to double check if taking a deduction is right for your individual situation.

Interest paid on first or second mortgages

The most common tax write-off relates to the interest you paid over the course of the year on the first or second mortgages for your primary residence. Your lender will send you a mortgage interest statement (Form 1098) that details the amount you paid in mortgage interest during the previous calendar year. Most homeowners qualify to deduct the full amount.

Certain closing fees

Certain closing fees qualify as tax deductions when you purchase a new home, including:

• Sales tax paid at closing
• Real estate taxes charged at closing
• Mortgage interest paid at settlement
• Interest paid at the time of purchase
• The loan origination fee, also known as points

Additional mortgage interest related write-offs

Depending on what you do for a living and how you generate your income, there exist scenarios where your mortgage interest can also be applied as a tax write-off for your home office.

Reduce your tax liability

If you do not currently own your home and would like to lower your taxable income through the mortgage interest tax deduction, speak with a mortgage broker and apply for loan prequalification to get started.

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