What Is the Mortgage Interest Deduction?

The mortgage interest deduction lets you deduct the interest paid on a home loan from your taxable income — but only if you itemize deductions. It applies to your primary home and one second home. For loans taken after December 15, 2017, you can only deduct interest on up to $750,000 of mortgage debt (older loans have a $1 million limit). Your lender will send you a Form 1098 showing how much interest you paid. This deduction is one of the biggest reasons people itemize.