Mortgage Interest Deductions (For taxpayers who itemize)
- The mortgage interest deduction for existing mortgages of up to $1 million (for principal residence and second homes, combined) taken out before December 15, 2017, will not be affected. Homeowners may also refinance mortgage debts existing on December 14, 2017, up to $1 million and still deduct the interest, so long as the new loan does not exceed the amount of the mortgage being refinanced.
- For any new loans as of January 1, 2018, (for principal residence and second homes, combined) the deduction will be limited to interest on $750,000 of principal.
- The interest on home equity loans will only be deductible if the proceeds are used to substantially improve the residence.