President Donald Trump’s tax and spending bill revives and expands homeowner tax breaks — while making the current mortgage interest deduction cap permanent.
The $750,000 limit on deductible mortgage debt ($375,000 for single filers) had been set to expire after 2025 and revert to the previous $1 million cap. Under the new law, that change is off the table.
While the deduction itself isn’t expanding, the bill restores and boosts other federal tax breaks that benefit homeowners. A deduction for mortgage insurance premiums has been revived, and a cap on state and local tax deductions has been temporarily raised — changes that could save thousands for some homeowners, especially in high-tax states.
The $750,000 mortgage deduction cap applies to acquisition debt used to buy, build or substantially improve a primary or secondary residence. There are no income limits, but homeowners must itemize their tax return to claim the deduction.
The cap isn’t indexed for inflation, however, meaning its value will erode over time as home prices and mortgage balances rise.
