Learn About the Mortgage Insurance Premium Tax Deduction

This deduction's future is uncertain

Rural house in Vermont.
Photo: © Jeff Randall / Photodisc / Getty Images

Mortgage insurance premiums can increase your monthly budget significantly—an additional $83 or so per month at a 0.5% rate on a $200,000 mortgage. However, in 2006, Congress made these payments tax-deductible to help reduce the burden of these costs. The tax deduction was scheduled to last through the 2016 tax year, but it has been extended through at least 2021. That means that the tax return you file in 2022 could include this deduction.

Here's what you need to know about the mortgage insurance premium deduction.

Key Takeaways

  • If you have a mortgage, many of your expenses may be tax deductible, including your mortgage insurance premiums.
  • The mortgage insurance premium deduction is not permanent in the tax code, but it has been extended every year since 2006.
  • Home equity loans and cash-out refinances do not qualify for the mortgage premium deduction.
  • To claim the deduction, you must itemize your taxes and have an income below the maximum phase-out threshold set each year.

What Is Mortgage Insurance?

Lenders typically require private mortgage insurance when they feel that there's a higher risk of default on the part of the homeowner. The mortgage insurance helps the lender secure the debt in the event of default.

In general, you can expect to pay for mortgage insurance when you can't (or don't want to) put down at least 20% on the property. The insurance policy can be issued by a private insurance company or by the Federal Housing Administration (FHA) or the Department of Agriculture's Rural Housing Administration. The Department of Veterans Affairs (VA) has a one-time funding fee instead of monthly mortgage insurance.

The Legislative Roller Coaster

The Tax Relief and Health Care Act first introduced the mortgage insurance deduction back in 2006. Congress extended it in 2015 when it passed the Protecting Americans from Tax Hikes (PATH) Act, but the deduction expired on December 31, 2016. The extension was good for only one year. 

This is one of those tax deductions that tends to expire and be resuscitated on an annual basis, and in 2018 Congress stepped in again. The Bipartisan Budget Act of 2018 retroactively extended the mortgage insurance premiums deduction again through 2017.

The Consolidated Appropriations Act in 2021 did extend the mortgage insurance deduction for the 2021 tax year, for filing in 2022.


Deductions for mortgage insurance payments are different from deductions for mortgage interest and real estate taxes—those remain intact despite being adjusted a bit under 2017's Tax Cuts and Jobs Act (TCJA). However, for tax filing purposes, they may often be calculated in the same process and on the same deduction form.

Historical Attempts to Make the Deduction Permanent

On January 8, 2019, California Representative Julia Brownley introduced the Mortgage Insurance Tax Deduction Act of 2019, which would have permanently enshrined the deduction in the tax code and would have applied to all amounts paid or accrued since December 31, 2017, but it was not passed.

Another attempt to make the deduction permanent occurred in March 2021 with the Mortgage Insurance Tax Deduction Act, but it, too, was stalled in Congress without definitive action.

In December 2021, the Middle Class Mortgage Insurance Premium Act again sought to make the deduction permanent, along with increasing the income threshold for the phaseout of the tax deduction for the 2021 tax year, but whether it will be passed in 2022 remains to be seen.

Loans That Qualify for Deductions

The mortgage insurance premium deduction applies only to loans taken out on or after January 1, 2007. Deductions related to mortgages must be for a home acquisition debt on a first or second home. A home acquisition debt is one whose proceeds are used to buy, build, or substantially improve a residence.

You typically can't rent the second home out—you must use it personally, such as a vacation home you visit in the summer. You might still qualify for a deduction, however, if you treat the second home as an income-producing business asset. Home equity loans don't qualify for the deduction, nor do cash-out refinances. However, refinance loans up to the amount of the original mortgage are covered. 

Income Limitations 

This deduction phases out and becomes unavailable at higher income levels. If you're single, filing as head of household, or married and filing jointly, the deduction begins phasing out by 10% for each $1,000 by which your adjusted gross income (AGI) exceeds $100,000. In effect, this means that you're not eligible to claim the deduction if your adjusted gross income exceeds $109,000. If you're married and filing separately, the phase-out begins at $50,000 and increases for each $500 by which you exceed this limit, effectively making you ineligible if your AGI exceeds $54,500.


The IRS issued a new Form 1040 after the TCJA took effect.

Claiming the Deduction

Mortgage insurance premiums paid during the year are reported on Form 1098. You should receive this form from your lender after the close of the tax year. You can find the amount you paid in premiums in Box 5. There’s currently no limit on the amount of the deduction you can claim if you and your loan qualify. You can deduct this entire amount.

Mortgage insurance premiums are itemized tax deductions. They're reported on line 13 of Schedule A, "Interest You Paid." You can’t claim the mortgage insurance premiums deduction if you claim the standard deduction—you must itemize using Schedule A. 

If you neglected to claim this deduction in previous years, although you could have, you can typically amend your tax return with the IRS up to three years after you file the original return (or two years after you've paid any tax due on that return, whichever is later).

Canceling Your Insurance

It can pay to check your current mortgage balance against your home's fair market value, even if it turns out that you can claim a tax deduction for PMI again. You no longer have to pay private mortgage insurance when your equity in the property exceeds 20%, but it's unlikely that either your lender or the insurer will point that out to you.

No one will voluntarily cancel your policy for you when you hit this magic number, but you can. Be prepared to have your home appraised, or get a value otherwise assigned by a professional, so you can prove that the insurance is no longer required. That way, regardless of whether Congress extends the deduction, you'll at least save on monthly costs by canceling your policy.

Frequently Asked Questions (FAQs)

How do I know whether I am eligible for a mortgage insurance tax deduction?

If you are below the maximum income threshold of $109,000, then you can claim a PMI deduction on your 2021 taxes.

Will I be able to deduct mortgage insurance premiums in 2022?

The deduction has not yet been extended to the 2022 tax year, but historically it has been extended every year since its initial adoption.

How do I claim a mortgage insurance premium tax deduction?

You can use Publication 936 to help calculate deductions related to your home mortgage. All amounts paid or accrued in 2021 will be entered on line 8d of Schedule A on your 1040 form.

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  1. Consumer Financial Protection Bureau. "What Is Mortgage Insurance and How Does It Work?"

  2. Department of Veterans Affairs. "Loan Fees."

  3. U.S. Congress. "H.R.6111 - Tax Relief and Health Care Act of 2006."

  4. House of Representatives Document Repository. "Protecting Americans From Tax Hikes Act of 2015."

  5. U.S. Congress. "H.R.1892 - Bipartisan Budget Act of 2018."

  6. Upnest. "Is Private Mortgage Insurance (PMI) Tax Deductible?"

  7. Tax Policy Center. "How Did the TCJA Change the Standard Deduction and Itemized Deductions?"

  8. Internal Revenue Service. "About Publication 936, Home Mortgage Interest Deduction."

  9. U.S. Congress. "H.R.284 - Mortgage Insurance Tax Deduction Act of 2019."

  10. U.S. Congress. "H.R.2276 - Mortgage Insurance Tax Deduction Act of 2021."

  11. U.S Congress. "H.R.6109 - Middle Class Mortgage Insurance Premium Act of 2021."

  12. Internal Revenue Service. "Publication 936, Home Mortgage Interest Deduction."

  13. Internal Revenue Service. "Changes to the Deductibility of Mortgage Insurance Premiums (MIP)."

  14. Internal Revenue Service. "Topic No. 308 Amended Returns."

  15. Consumer Financial Protection Bureau. "When Can I Remove Private Mortgage Insurance (PMI) From My Loan?"

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