Can I still deduct mortgage interest on my 2025 tax return, and what are the limits?

Yes, you can still deduct mortgage interest on your 2025 tax return — but only if you itemize deductions, and the loan must be within the debt limits set by the Tax Cuts and Jobs Act (TCJA).

The $750,000 debt limit:

For loans taken out after December 15, 2017, you can only deduct interest on up to $750,000 of qualified mortgage debt ($375,000 if married filing separately). If your total mortgage debt exceeds this, only the proportional interest is deductible. Loans originated before that date are grandfathered at the old $1 million limit.

What qualifies as a deductible mortgage:

• Your primary home (first mortgage, refinance, or HELOC used to buy/build/substantially improve the home)
• A second home (vacation home, boat with sleeping/kitchen/toilet facilities)
• Home equity loans and HELOCs — but ONLY if the proceeds were used to buy, build, or substantially improve the home securing the loan. Using a HELOC for a vacation or car does NOT qualify.

You must itemize to claim this deduction:

The standard deduction for 2025 is $15,000 (single) or $30,000 (married filing jointly). Unless your total itemized deductions exceed that amount, you're better off taking the standard deduction and the mortgage deduction provides no benefit. Run the math both ways — many homeowners, especially those with smaller mortgages, find the standard deduction wins.

What you need:

Your lender should have sent you Form 1098 by January 31, showing the mortgage interest paid in 2025. Report this on Schedule A (Form 1040), Line 8a or 8b.

Points paid at closing:

If you bought a home in 2025 and paid points to lower your interest rate, those points are generally deductible in the year paid (reported on Form 1098). Points on a refinance must be deducted over the life of the loan.

Tip: If you're on the borderline between standard and itemized, consider "bunching" — prepaying January's mortgage payment in December to push more interest into a single tax year.