Quick Answer
Yes, PMI is generally deductible as mortgage interest if your income is under $109,000 (single) or $54,500 (married filing separately). The average PMI payment is $200-300 monthly, potentially saving $500-1,500 annually in taxes depending on your bracket.
Best Answer
Robert Kim, Tax Return Analyst
Best for current homeowners who pay PMI monthly and want to understand their deduction options
Is PMI tax-deductible?
Yes, PMI premiums are generally deductible as mortgage interest, but there are income limits and specific rules. According to IRS guidelines, PMI is treated the same as mortgage interest for tax purposes, which means it goes on Schedule A under "Interest you paid."
The deduction applies to PMI paid on loans originated after 2006 for your primary residence. This includes conventional PMI, FHA mortgage insurance premiums (MIP), VA funding fees, and USDA guarantee fees.
PMI deduction income limits for 2026
The PMI deduction phases out based on your adjusted gross income (AGI):
The deduction phases out by 10% for each $1,000 over the threshold. For example, if you're single with $60,000 AGI, you can deduct 45% of your PMI premiums.
Example: Real PMI tax savings
Let's say you bought a $450,000 home with a $405,000 mortgage (10% down) and pay $270 monthly in PMI ($3,240 annually). Here's how the deduction works:
Scenario 1: Single filer, $45,000 AGI, 12% tax bracket
Scenario 2: Married filing jointly, $85,000 AGI, 22% tax bracket
Scenario 3: Single filer, $75,000 AGI, 22% tax bracket
Key requirements for PMI deductibility
Types of mortgage insurance that qualify
When PMI stops and tax implications
PMI typically cancels when your loan-to-value ratio reaches 78%, either through payments or home appreciation. Some borrowers request cancellation at 80% LTV. When PMI stops, you lose this deduction, but you're also saving the monthly premium.
If you're close to the 78% threshold, consider whether accelerated payments to eliminate PMI make sense given both the premium savings and lost tax deduction.
What you should do
First, check your Form 1098 from your lender — PMI should appear in Box 5. If you're itemizing deductions, include this amount on Schedule A, Line 8b ("Points not reported to you on Form 1098") or the appropriate mortgage interest line.
If your AGI puts you in the phase-out range, calculate the exact deductible amount using the IRS worksheet in Publication 936.
Use our return-scanner tool to verify you haven't missed PMI deductions from previous years or ensure you're claiming the correct amount.
Key takeaway: PMI averaging $200-300 monthly is fully deductible for most homeowners with AGI under $109,000 (married) or $54,500 (single), potentially saving $500-1,500 annually depending on your tax bracket and state taxes.
*Sources: [IRS Publication 936](https://www.irs.gov/pub/irs-pdf/p936.pdf) (Home Mortgage Interest Deduction), [IRS Publication 17](https://www.irs.gov/pub/irs-pdf/p17.pdf) (Your Federal Income Tax)*
Key Takeaway: PMI is deductible as mortgage interest for most homeowners, potentially saving $500-1,500 annually, but income limits apply and you must itemize deductions.
PMI deduction limits and tax savings by income and filing status
| Income Level | Filing Status | PMI Deduction % | Annual PMI $3,240 | Tax Savings (22% bracket) |
|---|---|---|---|---|
| Under threshold | All | 100% | $3,240 | $713 |
| $75K AGI | Single | 79.5% | $2,575 | $567 |
| $130K AGI | MFJ | 81.0% | $2,624 | $577 |
| Over $109K | Single | 0% | $0 | $0 |
| Over $218K | MFJ | 0% | $0 | $0 |
More Perspectives
Michelle Woodard, Tax Policy Analyst
Best for new homeowners who put down less than 20% and are paying PMI for the first time
PMI as a first-time homeowner
As a first-time buyer, you're likely paying PMI because you put down less than 20%. The good news: this expense is generally tax-deductible, which helps offset the added cost of homeownership.
Why PMI matters for first-time buyers: Most first-time buyers have lower incomes (often under the $109,000 married/$54,500 single thresholds), making them prime candidates for the full PMI deduction. Combined with mortgage interest and property taxes, PMI often pushes total itemized deductions above the standard deduction threshold.
Planning for PMI elimination
Unlike mortgage interest, PMI is temporary. You can eliminate it by:
Consider the tax impact when planning PMI elimination. If PMI is saving you $600 annually in taxes, but costing $3,000 in premiums, your net cost is $2,400 — still worth eliminating when possible.
FHA vs conventional PMI differences
FHA loans require mortgage insurance premiums (MIP) that work differently:
Key takeaway: First-time buyers with PMI should claim this deduction immediately — it's often hundreds in annual tax savings and helps justify the lower down payment strategy.
Key Takeaway: First-time buyers typically qualify for full PMI deductions due to lower incomes, making PMI elimination less urgent from a tax perspective.
Robert Kim, Tax Return Analyst
Best for recent movers who may have PMI on a new home and questions about multiple properties
PMI after moving
If you've recently moved and have a new mortgage with PMI, you can deduct the premiums on your primary residence. However, recent movers often have more complex situations to consider.
Multiple property scenarios:
Timing considerations
If you moved mid-year, you may have PMI payments on both properties. Only the PMI on your primary residence qualifies for the personal deduction. If you kept your former home as a rental, those PMI payments shift to business expenses.
Example: Moved in July 2026
AGI considerations for recent movers
Moving often creates unusual income patterns that can affect PMI deductibility:
Calculate your AGI carefully to determine if you fall within the PMI deduction income limits.
Key takeaway: Recent movers can deduct PMI on their new primary residence but must track which property qualifies as their primary residence throughout the year.
Key Takeaway: Recent movers can deduct PMI on their primary residence but must carefully track which property qualifies and how property status changes affect deductibility.
Sources
- IRS Publication 936 — Home Mortgage Interest Deduction
- IRS Publication 17 — Your Federal Income Tax (Individual Tax Guide)
Reviewed by Robert Kim, Tax Return Analyst on February 28, 2026
This content is for educational purposes only and is not a substitute for professional tax advice. Consult a qualified tax professional for advice specific to your situation.