When Mortgages Pay

One of the benefits many homeowners enjoy is the mortgage interest deduction (MID). This tax deductibility of interest paid on mortgages has been an incentive for homeownership since 1913. Individuals can deduct interest paid on mortgage debt of up to $1million.

The deduction is available for interest on mortgages for a principal residence and one additional residence. Sixty-three percent of families who claim the MID earn between $50,000 and $200,000 per year.

Ask a Prudential Waterfront Properties Realtor® about how the MID factors into their clients’ home buying decisions. For example, what impact does it have over a period of homeownership? While the MID is a great benefit, people usually don’t buy homes only because of the deduction. They buy homes to satisfy social, family and personal goals. However, an NAR survey of home buyers found that both first-time buyers and repeat buyers ranked the desire for tax incentives as an important reason to buy.