Is it worth mortgaging my home to get a tax deduction?

Is it worth mortgaging my home to get a tax deduction?

  • December 7, 2017
  • David Greene
  • Comments Off on Is it worth mortgaging my home to get a tax deduction?

In my opinion, you should never incur debt for the express purpose of lowering your taxes.   At this time it is true that people who have a mortgage get to take a deduction on their taxes; however, they only deduct the interest they pay, not the principal.  However, as you know, congress is currently trying to revise the tax code and we may lose many of our current deductions, including mortgage interest.  Even if we keep that deduction, in the later years of a mortgage, most of the payment is principal, so as the mortgage gets closer to being paid off, the less help it is on your taxes.  Also, it is not a dollar-for-dollar reduction in your tax bill.  For most people, every dollar spent on deductible interest results in a 15¢ to 20¢ or less reduction in tax.  Therefore, you should never carry a mortgage for the primary purpose of having a tax deduction.

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