OBBBA mortgage interest deduction rules have changed the landscape for homeowners who itemize. The One Big Beautiful Bill Act (OBBBA) permanently locks in the TCJA rule limiting itemized deductions for home mortgage interest to the first $750,000 of total home acquisition debt ($375,000 if married filing separately).
Home acquisition debt means mortgages used to buy or improve your main home and one other residence (like a vacation property).
OBBBA also keeps the TCJA restriction on home equity loan interest—you can’t deduct it unless the funds are used to buy or improve your primary or secondary residence, and the total still has to fit within the $750,000 / $375,000 cap. For background on how the standard deduction interacts with itemizing, see OBBBA Makes Standard Deduction Increases Permanent (and Bigger).
Beginning in 2026, OBBBA may allow you to deduct qualified mortgage insurance premiums for home acquisition debt (for policies issued after 2006). This deduction is treated as part of your qualified residence interest deduction.
If your loan is grandfathered, the old cap still applies: interest on up to $1,000,000 of home acquisition debt ($500,000 MFS) remains deductible. To qualify, the debt must have been taken out before December 16, 2017 under a binding contract entered before December 15, 2017, with the purchase closed before April 1, 2018. Refinancing grandfathered debt can keep the higher cap so long as the new principal doesn’t exceed the old principal.
Even with the mortgage cap, there’s room to plan. If you itemize, the increased SALT deduction cap can make more of your property taxes count toward itemized deductions. Combine that with the mortgage interest rules above, and—depending on your AGI—the 2026 mortgage insurance deduction might add incremental savings. The catch? That phase‑out is steep, so run the numbers.
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Tip: If you’re deciding whether to itemize or take the standard deduction under OBBBA, start with your projected SALT and mortgage interest totals, then compare to the latest standard deduction. When in doubt, run both scenarios.
