Mortgage Interest Deduction: The Limit and How It Works

The mortgage interest deduction can cut your taxes, but only if you itemize and meet IRS limits.Vitalii Vodolazskyi/Shutterstock11/1/2025|Updated: 11/1/2025Whether a mortgage interest deduction is valuable to you depends on several factors. The amount of your mortgage and tax bracket are major components. The deduction helps you reduce your taxes. This makes a home more affordable.But the mortgage interest deduction might not be for all homeowners. It’s important to know how it works and what its limits are.Mortgage Interest DeductionThe mortgage interest deduction allows you to deduct a limited amount of the mortgage interest from your taxable income, lowering the amount of tax you owe.Anne Johnson was a commercial property and casualty insurance agent for nine years. She was also licensed in health and life insurance. She went on to own an advertising agency, where she worked with businesses. She has been writing about personal finance for 10 years.Author’s Selected Articles