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Mortgage Interest Cap Calculator

The Tax Cuts and Jobs Act capped mortgage interest deduction at $750K of acquisition debt for loans originated after December 15, 2017 ($1M legacy cap for older loans). Married filing separately gets half the cap. Interest on debt above the cap is non-deductible. This calculator computes the pro-rata deductible interest and lost deduction.

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Deductible interest

$45,882

Non-deductible interest

$6,118

Applicable debt cap

$750,000

Debt above cap

$100,000

How the math works

Mortgage interest deduction caps debt at $750K (post-12/15/2017 originations) or $1M legacy. MFS gets half the cap. Interest on debt above the cap is non-deductible. Limit applies to total acquisition debt across primary and one second home.

HELOC and home equity loans qualify for deduction only if used to substantially improve the home. Cash-out refi proceeds used for non-home purposes are not deductible.

How to Use

  1. Enter total acquisition mortgage debt (across primary and one second home).
  2. Indicate origination date (post-12/15/2017 = $750K cap).
  3. Enter filing status.
  4. Enter annual mortgage interest paid.
  5. Read deductible vs non-deductible interest.

Frequently Asked Questions

Can I have two mortgages?

Yes — primary and one second home count together against the cap. Investment property mortgages have no cap (full deductibility on Schedule E).

HELOC deductibility?

Only if used to 'substantially improve' the home (acquisition indebtedness). HELOC for college, cars, vacation = not deductible after TCJA.

TCJA expiration?

Current rules expire after 2025 — could revert to $1M cap if not extended. Watch tax legislation in 2025 for changes.

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