Money Moves

PMI Is Tax-Deductible Again in 2026. We Ran the Numbers, and Many Buyers Will Save $0

Mortgage insurance is deductible again for 2026, but only if you itemize and earn under $109,000. Our examples show savings of $0 to about $220.

By Shivam Kaushik · Updated November 11, 2026 · 5 min read

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Mortgage insurance is tax-deductible again for 2026. It’s the first time since 2021. But when we ran the numbers, the tax break turned out to be small, and only for a narrow group. You have to itemize, and your income has to be under about $109,000. Even then, a typical buyer saves around $160 to $220 on their 2026 taxes.

Quick answers

What changed: the One Big Beautiful Bill Act (signed July 4, 2025) made mortgage insurance premiums deductible as mortgage interest again, starting with tax year 2026, and permanently.
What counts: private mortgage insurance (PMI) plus mortgage insurance from FHA, VA and the Rural Housing Service (USDA), on contracts issued after 2006.
The income catch: the deduction shrinks 10% for every $1,000 of AGI over $100,000 and is gone just above $109,000 ($50,000–$54,500 if married filing separately).
The bigger catch: you only benefit if you itemize. The 2026 standard deduction is $32,200 for married couples and $16,100 for singles.

The fine print, in plain English

The new law reinstates an old rule: mortgage insurance premiums on the loan you used to buy your home are treated like mortgage interest. They go on Schedule A along with your other itemized deductions. Your lender will report them on Form 1098. The IRS instructions for Form 1098 again cover box 5 for mortgage insurance premiums of $600 or more. They define qualified mortgage insurance as coverage from the VA, FHA or Rural Housing Service, or private mortgage insurance, under a contract issued after Dec. 31, 2006.

The income limit comes straight from the tax code. Your deductible amount drops by 10% for each $1,000 (or part of $1,000) your adjusted gross income goes over $100,000. Here’s how that plays out:

Your AGI	Share of mortgage insurance you can deduct
$100,000 or less	100%
$100,500	90%
$104,000	60%
$108,500	10%
Over $109,000	0%

Limits for married filing separately are half these amounts. These dollar figures are fixed in the law and don’t rise with inflation.

We ran three real-life examples

All three assume a 30-year fixed loan at 7.18% (Freddie Mac’s Nov. 5 average), 5% down and a first full year of payments in 2026. The mortgage insurance amounts are illustrative. Your actual premium depends on your credit score, down payment and loan type.

	Couple, $95k AGI, $400k home	Single, $70k AGI, $300k home	Couple, $95k AGI, $250k home
Year-1 mortgage interest	$27,163	$20,372	$16,977
State & local taxes (example)	$7,000	$5,500	$5,000
Mortgage insurance (example)	$1,800	$1,350	$1,200
Itemized total	$35,963	$27,222	$23,177
Standard deduction (2026)	$32,200	$16,100	$32,200
Itemize?	Yes	Yes	No
Tax saved by the PMI deduction	≈ $216 (12% bracket)	≈ $162 (12% bracket)	$0

Our calculations. Interest is the actual first-year interest on a 95% loan at 7.18%. Tax brackets are from the IRS’s 2026 inflation adjustments. Example amounts are for illustration only. This is not tax advice.

ExampleThe couple buying the $250,000 home pays $1,200 of PMI, but their itemized deductions ($23,177) fall well short of the $32,200 standard deduction. They take the standard deduction, and the PMI deduction is worth nothing to them. This is the most common outcome for modest-priced homes.

Why the people who pay PMI rarely get the break

There’s an irony here. PMI is mostly paid by buyers who put less than 20% down. They tend to have smaller loans and moderate incomes. Smaller loans mean less interest, which makes it harder to beat a $32,200 standard deduction. And buyers with bigger loans who easily itemize often earn more than $109,000, where the deduction disappears.

So the sweet spot is narrow: a fairly large loan, income under about $100,000, and itemizing anyway. That’s more common in the first few years of a loan, when interest is highest, and in high-tax states. There, state and local taxes (deductible up to $40,400 in 2026) push the itemized total over the line.

Myth buster“I can deduct the PMI I paid in 2025.” No. The deduction had lapsed after 2021 and only comes back for tax years starting in 2026. PMI paid in 2025 isn’t deductible on the return you filed this year.

Fun factThe income limit (that $100,000 starting point) is the same number Congress used when the deduction first appeared in 2007. It has never been adjusted for inflation, so it covers far fewer homebuyers now than it did then.

What this means for you

Buyers with PMI and AGI under $100,000: add up your 2026 interest (from your servicer), property tax and state tax. If the total is close to your standard deduction, the PMI deduction may tip you into itemizing.
Earning a little over $100,000: a pre-tax 401(k) or HSA contribution before Dec. 31 lowers AGI and can rescue part of the deduction. Ask a tax pro whether it’s worth it in your case.
FHA borrowers: your monthly MIP counts too. But removing MIP (by refinancing once you have 20% equity) saves far more than any deduction. See how to remove FHA mortgage insurance.
Thinking about a bigger down payment to skip PMI? At these small tax savings, the deduction shouldn’t change that decision. Compare the cost of PMI vs. waiting with our mortgage calculator and affordability calculator.

Choosing between loan types? FHA vs. conventional walks through how each one handles mortgage insurance.

FAQ

Is PMI tax-deductible in 2026?

Yes. Starting with tax year 2026, qualified mortgage insurance premiums are deductible as mortgage interest if you itemize. The deduction phases out between $100,000 and $109,000 of AGI ($50,000–$54,500 if married filing separately).

Does FHA mortgage insurance (MIP) count?

Yes. The IRS’s definition of qualified mortgage insurance includes coverage provided by the FHA, the VA and the Rural Housing Service, as well as private mortgage insurance, on contracts issued after 2006.

Where do I find how much PMI I paid?

Your mortgage servicer reports it on Form 1098 (box 5) early next year if you paid $600 or more. You can also check your year-end escrow or loan statement.

Will most homeowners benefit?

No. Most households take the standard deduction ($32,200 for married couples in 2026), so they get no extra benefit from deducting mortgage insurance. In our examples, buyers who did itemize saved about $160–$220.

Sources: IRS Instructions for Form 1098; IRS tax year 2026 inflation adjustments; Internal Revenue Code §163(h) as amended by P.L. 119-21 (One Big Beautiful Bill Act, sec. 70108); Freddie Mac Primary Mortgage Market Survey, Nov. 5, 2026. Calculations by Keys & Coffee. This article is general education, not financial or tax advice. Keys & Coffee is not a lender.

Written by

Shivam Kaushik· IMSHIVA

Founder & Director, QuibbleTech Solutions Pvt Ltd · Editor, Keys & Coffee

Shivam Kaushik is the founder of QuibbleTech Solutions Pvt Ltd and the editor of Keys & Coffee. He is not a licensed loan officer or financial adviser. Every guide here is written in plain English and checked against official sources such as the CFPB, HUD, Fannie Mae, Freddie Mac and the Federal Reserve. For advice on your own loan, talk to a licensed lender.

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Keys & Coffee is an independent education site. We are not a lender or mortgage broker, we do not take loan applications or payments, and nothing here is financial advice. This site is not affiliated with Axia Home Loans, Axia Financial, LLC, or Planet Home Lending. Rates and rules change often — always confirm details with a licensed loan officer and check any lender on the NMLS Consumer Access site.