Comments on: Mortgage Interest Deduction Myth

By: sally

sally — Thu, 12 Jan 2012 02:18:42 +0000

Funny that so many of the comments on here are slamming the author about rent vs. buy. I am in a position to either pay off my mortgage or keep it and found the article very informative. The author is simply stating the benefits of having no mortgage and no tax benefits, rather than a mortgage and a tax-break. He’s not getting into rent vs. buy, and he clearly states that in the article. For all of you who have said he has no brain, shame on you. I am thankful for the information.

By: Anonymous

Anonymous — Sun, 11 Dec 2011 14:19:49 +0000

Is the % on my mortg.payment in 2011 able to be written-off,if itemizing,in 2012??

By: adam carolla fan

adam carolla fan — Wed, 10 Aug 2011 00:40:40 +0000

totally agree with moboy, here.

i love the standard deduction. i plan on renting for another several years, and then when i do buy, i plan on having such a small mortgage (or none at all ?) that i’ll still be taking the standard deduction.

my dad had always told me about the tax advantages of being a homeowner, but now it’s me going to him and explaining that his advice, though well-intentioned, was misguided!

By: robert

robert — Thu, 21 Apr 2011 01:37:14 +0000

you sir are an idiot. ( guy who wrote this)
So after thirty years do I get to keep my apartment. Idiot, And eventually when my interest is low enough I can take the standard deduction on the flip side so its a win win.

By: Fresno Jewell

Fresno Jewell — Sat, 26 Mar 2011 00:54:15 +0000

A number of you have pointed out that home ownership has the intrinsic value of a roof over your head and that homes appreciate in value. For at least the next 10 years there is no guarantee, or even indication, that homes will appreciate in value. In the meantime, a storm blew down my backyard fence which I now have to replace at a cost of about 15,000. My home needs electrical updating but since it’s underwater I can’t even get an equity loan for the work. In 15 or 20 years I’ll need a roof. Eventually a new water heater. Double paned windows, a new garage door, etc. etc. A home can be a great thing for some, it’s not a great thing for A LOT of people. Don’t believe the hype.

By: Randy

Randy — Mon, 14 Feb 2011 12:54:00 +0000

Just found this article looking for news on what might happen to the mortgage interest deduction in 2011 and beyond.

Found one line in your article that is no longer true. Schedule L was good for 2009, but is not available for 2010.

As for me, even if the mortgage interest deduction goes away, I’ll still itemize. I have enough other deductions to put me over the top.

By: Woody

Woody — Wed, 02 Feb 2011 18:32:19 +0000

I don’t know what form you are looking at, but line 7 of form L is deductions for taxes paid for a CAR purchase for the 2010 tax year.

By: Mark

Mark — Wed, 26 Jan 2011 18:01:48 +0000

I agree with Billbo and will take it one step further.

The principle and interest (P&I) portion of your payment remains the same throughout the loan for typical fixed mortgage. Your monthly payment today requires a greater % of your overall income. In 30 years, that same payment will require a much smaller % of your overall income.

For example, $150,000 today will be the equivalent of $364,089 in 30 years.

By: BillBo

BillBo — Tue, 07 Dec 2010 00:57:40 +0000

The real question isn’t so much about rent vs buy as it is carrying a mortgage *just* to get the interest deduction vs paying off your home.

For just about any mortgage, you are paying interest (tax-deductible) and principal (which is not). Simple math shows that in any given tax year, your tax savings MUST equal your total interest paid PLUS your principal paid *just to break even* overall. The interest deduction simply lowers taxable income. It is not a dollar-for-dollar reduction of your tax liability.

Carrying a mortgage to purchase a primary residence is acceptable because it is a tangible asset (thus the “real” in real estate), but carrying a mortgage just for tax purposes is a losing proposition.

By: Bob Roberts

Bob Roberts — Sun, 14 Nov 2010 20:16:56 +0000

Looks like someone didn’t make it through high school and critical thinking.

Notwithstanding the above arguments (which are both valid against your flawed assessment), the house you purchase has intrinsic value in that it is a roof over your head. This value continues to exist even after you’ve paid the loan off. So, even if you pay more in interest than you would in rent, after 30 years you’re still paying rent, whereas if you had purchased the house, your interest payments (and principal payments) are $0.

You don’t get a free pass on rent after 30 years, do you? Not only do you have a place to live, you also have the have the cash value of the house, which you own outright.

By: jacko

jacko — Sun, 14 Nov 2010 02:14:54 +0000

You are not making an apples to apples comparison. If you weren’t paying interest you would be paying rent. What has the person paid in the above scenario for rent? IF you take a similar product for rent and compare what the person pays in rent versus all of the costs of owning including the tax deduction then you will have a more accurate answer. The home owners who make good financial decissions overall will do better over teh long term because their property appreciates in value.

By: Ben

Ben — Fri, 05 Nov 2010 17:01:19 +0000

Is this article written only for those fortunate enough to live in states w/ no state income tax? For many people, the state income tax deduction alone or combined with other itemized deductions may meet or exceed the standard deduction. If that’s the case, then potentially 100% of your mortgage interest deduction is “excess” deduction above the standard deduction amount. As Bsj2312 mentions above, assuming that mortgage interest will be your only itemized deduction makes absolutely no sense.

By: Dave

Dave — Thu, 09 Sep 2010 01:17:58 +0000

Folks….I haven’t seen any comments on the fact that with all good mortgage interest, comes fat property taxes which must be included….can’t have one without the other…especially in the northeast.

By: Useyourmind

Useyourmind — Sat, 04 Sep 2010 03:01:09 +0000

Without getting into the details financially or economically, that is one of the worst arguments I’ve read in quite a while. It seems grown out of the complacent American bias that “the government is always trying to screw me.” the worst part is that, if this website gets enough traffic, there is at least one person out there convincing people not to buy a house because the “mortgage interest deduction is a sham.”

By: Pankaj

Pankaj — Mon, 30 Aug 2010 22:52:04 +0000

These calculation does not take in account of property tax, state income tax, local income tax, vehicle tax etc are eligible in itemized deduction. Also it does not take in account of benefit of 2% annual home price appreciation. Yes there is cost of maintenance of property.