Form 1098 Mortgage Interest Reconciliation Calculator 2026
Reconcile your Form 1098 line by line. Calculate deductible mortgage interest with the $750K acquisition debt cap, Box 6 points deduction (purchase vs refi amortization), and complete Schedule A mortgage interest worksheet.
$
Primary deductible amount from Form 1098 $
Used to check acquisition debt cap $
From 1098 β purchase points usually deductible in full $
If positive, reduces your current deduction $
$0
Total Mortgage Interest Deduction
$0
Deductible Box 1 Interest
$0
Points Deduction (Box 6)
β
Acquisition Debt Cap Status
Form 1098 Mortgage Interest Deduction Worksheet
Form 1098 β Mortgage Interest Deduction Guide 2026
Form 1098 is issued by your mortgage servicer and reports key data for your Schedule A itemized deduction. Box 1 is the primary figure β mortgage interest received during the year. However, if your loan balance exceeds the $750,000 acquisition debt cap (or $1M for pre-2018 loans), you must prorate the deduction.
Acquisition Debt Cap β $750K vs $1M
Post-2017 loans: cap = $750,000 (single or MFJ) / $375,000 (MFS)
Pre-Dec 16, 2017 loans: grandfathered at $1,000,000 cap
Refinances of pre-2018 loans: $1M cap maintained up to original balance
If loan > cap: Deductible Interest = Interest Paid Γ (Cap Γ· Average Loan Balance)
Average loan balance = (Jan 1 balance + Dec 31 balance) Γ· 2
Pre-Dec 16, 2017 loans: grandfathered at $1,000,000 cap
Refinances of pre-2018 loans: $1M cap maintained up to original balance
If loan > cap: Deductible Interest = Interest Paid Γ (Cap Γ· Average Loan Balance)
Average loan balance = (Jan 1 balance + Dec 31 balance) Γ· 2
Points: Purchase vs Refinance
Purchase points (Box 6): Generally deductible in full in the year paid.
Requirements: primary residence, points β€ area norms, charged for use of money, paid at closing.
Refinance points: Amortized over life of loan.
$6,000 points on 30-year refi = $200/year deductible ($6,000 Γ· 30)
If refi again: deduct all remaining unamortized points in year of new refi.
Requirements: primary residence, points β€ area norms, charged for use of money, paid at closing.
Refinance points: Amortized over life of loan.
$6,000 points on 30-year refi = $200/year deductible ($6,000 Γ· 30)
If refi again: deduct all remaining unamortized points in year of new refi.
Extended
$1M Grandfather Analysis + Refinance Points Amortization
Pre-2018 $1M cap comparison, refi points amortization schedule, and over-cap interest proration worksheet
$750K vs $1M Cap β Impact at Different Loan Balances
| Loan Balance | 5% Interest | Post-2017 Deductible | Pre-2018 Deductible | Difference |
|---|
Refinance Points Amortization Schedule
Enter Box 6 points above and select "Refinance" to see annual deduction schedule.
| Year | Annual Points Deduction | Cumulative Deducted | Remaining Unamortized |
|---|
Note on second mortgages and HELOCs: After TCJA, interest on home equity loans and lines of credit is only deductible if the loan proceeds were used to buy, build, or substantially improve the home. Interest on HELOCs used for personal expenses (debt consolidation, vacations, etc.) is NOT deductible regardless of the $750K cap. If you have a HELOC, you must track how proceeds were used to determine deductibility.
Frequently Asked Questions
What is the mortgage interest deduction limit in 2026?
For loans originated after December 15, 2017, the mortgage interest deduction is limited to interest on up to $750,000 of acquisition debt (home purchase, substantial improvement). This limit applies per taxpayer β married filing separately is limited to $375,000 each. Loans originated before December 16, 2017 are grandfathered at the higher $1,000,000 limit. Loans refinanced after that date maintain the grandfathered $1M limit only up to the balance of the original pre-2018 loan. If your mortgage balance exceeds the applicable cap, you can only deduct the portion of interest attributable to the capped amount.
What is reported in each box of Form 1098?
Box 1: Mortgage interest received (most important β this is your basic deduction). Box 2: Outstanding mortgage principal as of January 1 (used to check acquisition debt cap). Box 3: Mortgage origination date (determines whether $750K or $1M cap applies). Box 4: Refund of overpaid interest from a prior year (reduces current deduction). Box 5: Mortgage insurance premiums β no longer deductible as of 2022. Box 6: Points paid on purchase mortgage (immediately deductible) or refinance points (amortized). Box 7-11: Other information including property address, account number, and lender details.
Are mortgage points immediately deductible?
Points paid to originate a loan on your primary residence for a PURCHASE are generally deductible in the year paid as home mortgage interest, provided the points represent compensation for money use (not closing costs for services). Points paid on a refinance must be amortized over the life of the loan β you deduct 1/30th per year on a 30-year refinance, for example. If you sell the home or refinance again before the amortization period ends, any remaining unamortized points from the previous refinance can be deducted all at once in the year of the new refinance or sale.
How do I calculate deductible interest if my loan exceeds $750,000?
If your acquisition debt exceeds $750,000 (or $1M for pre-2018 loans), you must prorate the interest. The formula is: Deductible Interest = Actual Interest Paid Γ ($750,000 Γ· Average Loan Balance). For example, if your average loan balance is $1,200,000 and you paid $48,000 in interest: Deductible = $48,000 Γ ($750,000 Γ· $1,200,000) = $48,000 Γ 62.5% = $30,000. The remaining $18,000 is personal interest and not deductible. IRS Publication 936 provides worksheets for this calculation.
Was mortgage insurance premium (Box 5) ever deductible and is it in 2026?
Mortgage insurance premiums (PMI) were deductible as qualified residence interest through tax year 2021. Congress repeatedly extended this deduction but did not extend it beyond 2021, so Box 5 PMI premiums are NOT deductible in tax years 2022 through 2026 under current law. The extension has been proposed but not enacted as of 2026. Box 5 should be ignored for current-year deduction purposes. If you paid PMI before 2022, check whether you need to amend prior returns to capture missed deductions (3-year amendment window).