Mortgage Points Tax Deduction

Paying points on a home loan last year makes you eligible to deduct their value.

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Mortgage points tax deduction

Points are extra charges paid at closing and are really nothing more than prepaid interest. They are tax-deductible if you are itemizing.

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Mortgage points deduction in full

To deduct your points in full this year, you must answer yes to the following questions:


  • is the mortgage is secured by your main home?
  • was the loan used to buy or build your main home?
  • are points an established practice in the area?
  • are the points paid not more than usual in that area?
  • has the cash method of accounting been used?
  • have the points been paid in place of normally separate costs?
  • are the total points paid not more than the total un-borrowed funds?
  • were the points computed as a percentage of the loan principal?
  • are the points listed as such on the mortgage settlement statement?

Annual mortgage points deduction

If you cannot claim your points in a single year, you must spread the deduction out for the life of the loan.

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Related IRS publications

Get more information on home mortgage interest tax deduction from IRS Publication 936

For a paper return you need to complete Schedule A and attach it with your return.

Note: you will need an Adobe Acrobat Reader to view these publications, which you can get here. (But you probably already have it.)