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Mortgage

Is private mortgage insurance tax deduction possible?

April 2, 2025 4 Min Read
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Is private mortgage insurance tax deduction possible?
Private Mortgage Insurance (PMI) Federal Income Tax Credit Return

Good Brigade/Getty Image

Private mortgage insurance (PMI) has been tax deductible for homeowners over the past few decades. PMI is mandatory for homeowners who have paid less than 20% down payments at home and provide additional protection to lenders.

In 2019, Congress reintroduced a federal tax credit that allows PMI to pay the ability to pay PMI to amortise premiums for the 2018, 2019, 2020 and 2021 tax years. This deduction expired at the end of 2021, but you may be able to file an amended return and claim retroactively to these tax years.

Is mortgage insurance tax deductible?

no, Private mortgage insurance Tax deductions are not available now. Mortgage insurance deductions were only available to eligible homeowners for the 2018-2021 tax year.

“The private mortgage insurance tax credit expires at the end of 2021 and Congress has not extended this provision,” said Dana Ronald, CEO of the consulting firm that serves California and Nevada. “This means that homeowners will no longer be able to claim PMI premium deductions in federal income taxes starting in the 2022 tax year.”

PMI Tax Deduction Requirements

If you qualify for the PMI tax credit but do not take it, you may be able to modify the old return to claim it. If so, remember:

  • The deduction is only permitted if a mortgage with a PMI is discharged after January 1, 2007.
  • A home refinanced after January 1, 2007 will qualify for the PMI deduction if it is your primary residence.
  • If your mortgage is taken away after January 1, 2007, the second home may be eligible for a deduction, but that depends on how you use the home. The PMI for the second property is eligible only if the home is privately used and not rented.
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There were also restrictions on the following PMI deductions:

  • Mortgage insurance deductions apply only to refinance funds up to the original loan amount, with additional money taken on a new loan (like cash-out refi).

Again, this tax credit will not be available for tax year 2022 or subsequent tax years.

How much can you save with the PMI tax credit?

Homeowners typically pay between $30 and $70 a month on PMI Premium for every $100,000 funding. Freddie Mac estimate. The premium, together with the mortgage principal, constitutes part of the monthly repayment; interest. However, the down payment, type of loan, and the size of the lender’s requirements can all affect actual costs.

How much you save depends on how much you owe and your tax bracket. Let’s say you paid $120 a month with PMI Premium if your adjusted gross income was $100,000 and the PMI tax credit was still available. Assuming you can itemize the deduction and fully deduct all premiums, you’ll save $1,440 in your taxable income.

PMI Tax Deduction FAQ

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