Mortgage Interest Deduction
Definition - What does Mortgage Interest Deduction mean?
A mortgage interest deduction is a tax deduction for interest that is paid annually on a mortgage loan. This write-off allows homeowners to save money on their taxes. The amount of money that they pay on interest for their mortgages is simply subtracted from their overall taxable income. Mortgage interest deductions are offered for the majority of mortgage-paying homeowners.
Justipedia explains Mortgage Interest Deduction
Mortgage interest deductions create incentive for people to purchase homes. The reason is because they lessen the tax burden for homeowners with mortgages. In other words, these deductions make the overall cost of purchasing a home and paying taxes more affordable. It is important to note that it is only the interest, however, and not the actual mortgage loan repayments that are deductible. But this number can still be substantial for many people who have mortgages.