Quick Answer
The $750,000 mortgage interest deduction limit applies to new home loans taken after December 15, 2017. You can deduct interest on up to $750,000 of mortgage debt ($375,000 if married filing separately). Loans from before December 16, 2017 are grandfathered at the old $1 million limit.
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Robert Kim, Tax Return Analyst
Best for homeowners trying to understand how the $750,000 limit affects their mortgage interest deduction
How the $750,000 mortgage interest deduction limit works
The $750,000 limit applies to new mortgage debt incurred after December 15, 2017. This means you can deduct the interest paid on up to $750,000 of qualifying home loan debt ($375,000 if married filing separately). Any interest on mortgage debt above this limit is not deductible.
Example: $900,000 mortgage taken in 2023
Let's say you bought a home in 2023 with a $900,000 mortgage at 6.5% interest:
You can only deduct $48,750 in mortgage interest, not the full $58,500 you actually paid.
Grandfathered loans from before December 16, 2017
If you took out your mortgage on or before December 15, 2017, you're grandfathered under the old rules:
What qualifies as acquisition debt
The $750,000 limit applies to "acquisition debt" — money borrowed to:
According to [IRS Publication 936](https://www.irs.gov/pub/irs-pdf/p936.pdf), the debt must be secured by the home and used to acquire, build, or substantially improve the property.
Key factors that affect your deduction
What you should do
Calculate your deductible mortgage interest using the appropriate limit for your situation. If you're near the standard deduction threshold ($30,000 for married filing jointly in 2026), compare itemizing versus taking the standard deduction to see which saves more money.
[Use our return scanner tool to check if you've been claiming the correct mortgage interest deduction →](return-scanner)
Key takeaway: The $750,000 mortgage interest deduction limit applies to new loans after December 15, 2017, potentially reducing your tax benefit by thousands of dollars compared to the old $1 million limit.
*Sources: [IRS Publication 936](https://www.irs.gov/pub/irs-pdf/p936.pdf), Tax Cuts and Jobs Act of 2017*
Key Takeaway: The $750,000 mortgage interest deduction limit applies to new loans after December 15, 2017, potentially reducing your deduction by $16,250 annually on a $1 million mortgage at 6.5% interest.
Mortgage interest deduction limits by loan origination date and filing status
| Loan Date | Single/MFJ Limit | MFS Limit | Grandfathered? |
|---|---|---|---|
| Before Dec 16, 2017 | $1,000,000 | $500,000 | Yes |
| After Dec 15, 2017 | $750,000 | $375,000 | No |
| Refinanced (pre-2018 loan) | $1,000,000* | $500,000* | Yes* |
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Robert Kim, Tax Return Analyst
Best for first-time buyers planning their home purchase and understanding tax implications
What this means for your home buying budget
As a first-time buyer, the $750,000 mortgage interest deduction limit directly affects the tax benefits of homeownership. Since you'll be taking out a new loan, you're subject to the current $750,000 limit, not the old $1 million limit.
Planning your purchase price
If you're considering a home requiring more than $750,000 in financing, factor in the reduced tax benefit:
Example: $850,000 home with 10% down
First-time buyer considerations
Key takeaway: Factor the $750,000 mortgage interest limit into your home buying budget, especially if considering expensive markets where this limit significantly impacts your tax savings.
Key Takeaway: The $750,000 limit reduces the tax advantage of expensive homes, so factor this into your buying decision and monthly payment calculations.
Robert Kim, Tax Return Analyst
Best for current homeowners evaluating refinancing options and understanding how it affects their deduction limit
How refinancing affects your deduction limit
Your mortgage interest deduction limit when refinancing depends on when you originally took out your loan:
If your original loan was before December 16, 2017:
If your original loan was after December 15, 2017:
Cash-out refinancing example
You have a $900,000 mortgage from 2016 (grandfathered at $1 million limit). You refinance for $950,000, taking $50,000 cash:
What you should do
Before refinancing, calculate how the mortgage interest deduction limit will affect your tax savings. If you originally borrowed before December 16, 2017, avoid increasing your loan balance unless necessary to preserve the higher $1 million limit.
Key takeaway: Refinancing a pre-2018 mortgage without increasing the balance preserves your $1 million deduction limit, but cash-out refinancing may subject the additional amount to the lower $750,000 limit.
Key Takeaway: Preserve your grandfathered $1 million limit by avoiding cash-out refinancing unless the additional borrowing serves a qualifying purpose under current tax law.
Sources
- IRS Publication 936 — Home Mortgage Interest Deduction
Related Questions
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.