IRS Form 1098 “Mortgage Interest Statement” Explained

IRS Form 1098, Mortgage Interest Statement, is sent by your mortgage lender or servicer to report the mortgage interest you paid during the year. Lenders file it when they receive $600 or more of interest from you. You use it to claim the mortgage interest deduction if you itemize on Schedule A.

What’s on Form 1098

• Box 1: mortgage interest received from you
• Box 2: outstanding mortgage principal at the start of the year
• Box 3: mortgage origination date
• Box 4: refund of overpaid interest
• Box 5: mortgage insurance premiums
• Box 6: points paid on the purchase of a principal residence
• Boxes 7-11: property address and other loan details. Some lenders also show real estate taxes paid from escrow.

How Much Interest Is Deductible?

• Acquisition debt limit: for mortgages taken out after December 15, 2017, interest is deductible on up to $750,000 of debt used to buy, build or substantially improve your main home and one second home ($375,000 if married filing separately). Older mortgages may qualify for the $1 million limit. These limits were made permanent by 2025 legislation.
• Home equity loans: interest is deductible only if the money was used to buy, build or substantially improve the home securing the loan.
• Mortgage insurance premiums: beginning in 2026, qualifying premiums are again treated as deductible mortgage interest.
• Points: points on a home purchase are often deductible in the year paid. Points on a refinance are usually deducted over the life of the loan.

Itemizing vs. the Standard Deduction

Mortgage interest helps only if your total itemized deductions exceed your standard deduction. For 2026 the standard deduction is $16,100 for single filers, $32,200 for married filing jointly, and $24,150 for heads of household, according to the IRS.

Rental and Business Property

Interest on a mortgage for rental property isn’t claimed on Schedule A. It’s deducted on Schedule E against rental income, without the $750,000 limit.

Tips

• If you refinanced or your loan was sold, you may receive more than one Form 1098. Add them together.
• If you’re on a loan with someone who isn’t your spouse, each person generally deducts the interest they actually paid.

Selling your home? See IRC Section 121: Home Sale Gain Exclusion.

Get Help From Diehl CPA

Tax rules change often, and the right answer depends on your full financial picture. Diehl CPA, led by Mark Diehl, CPA, CFE, prepares returns and builds tax plans for investors, retirees and closely held businesses. Learn about our tax return preparation and investment tax planning services, or contact us to talk through your situation.

This article is general information, not tax or legal advice for your specific situation. Updated October 2026.