Which mortgage insurance premiums are tax deductible?


Mortgage insurance premiums (MIPs) are tax deductible if they were issued as qualified mortgage insurance. That is, mortgage insurance premium tax deductions are available for:

  • Private Mortgage Insurance (PMI) as per the Homeowners Protection Act (HPA) of 1998, as amended in December 20, 2006;
  • Mortgage insurance issued by the Department of Veteran Affairs (VA), the Rural Housing Service (RHS), and the Federal Housing Administration (FHA). MIP issued by VA is referred to as VA funding fee and can vary from 0% to 3.3% of the loan amount.

Tax Deductibility on Mortgage Insurance

Mortgage insurance is usually issued along with the mortgage loan. It is needed for loans with less than 20% down payment.

Some lenders offer borrowers to take higher rate on the mortgage, or get a piggyback loan - first mortgage combined with a second mortgage or a home equity loan/line of credit. Current mortgage insurance tax deductibility makes MIPs and PMI more competitive and attractive to homebuyers.

Mortgage insurance is made tax deductible as of 2007 through 2010 for individuals with adjusted gross income of up to $54,500 (or $109,000 if married and filing jointly).

Mortgage insurance premium is fully tax deductible for individuals with annual income of up to $50,000; or combined income of $100,000 for couples. If income exceeds these limits, MIP tax deductions are reduced and non-existent for individuals with adjusted income of over $54,500 (or $109,000 for married borrowers).

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
Was this Mortgage QnA helpful?
Not at all
  • Currently 2.8/5 Stars
  • 1
  • 2
  • 3
  • 4
  • 5
Add to this Answer

Mortgage QnA is not a common forum. We have special rules:

  • Post no questions here. To ask a question, click the Ask a Question link
  • We will not publish answers that include any form of advertising
  • Add your answer only if it will contrubute to the quality of this Mortgage QnA and help future readers
If you have trouble reading the code, click on the code itself to generate a new random code. Verification Code Above:
Bookmark and share this QnA: