M
ortgage‑interest deductions are a key tool for homeowners, and real‑estate professionals who grasp their mechanics can guide clients toward choices that fit their financial plans. The July passage of H.R.1, dubbed the One Big Beautiful Bill Act, incorporated several of the National Association of REALTORS®’ top tax priorities. Throughout the 2025 reform debate, NAR’s advocacy team worked to ensure legislators understood how their decisions would shape the housing market and broaden home‑ownership access.
NAR secured the preservation of the full mortgage‑interest deduction (MID) in the final package. The MID lets eligible taxpayers subtract the interest paid on a qualifying home loan from taxable income, lowering federal tax liability and often delivering substantial savings. For first‑time buyers transitioning from rent to ownership who can itemize, the deduction can be a decisive advantage, underscoring the financial benefit of buying versus renting.
A national survey of 1,000 registered voters, conducted by Public Opinion Strategies and Hart Research in early April, found 91 % support for keeping the MID, with a 3.10 % margin of error. To claim the deduction, homeowners must itemize rather than take the standard deduction, and the loan must meet IRS limits—generally $750,000 or less and secured by a primary or secondary residence.
Evan Liddiard, NAR’s Director of Federal Tax Policy, notes that many homeowners cannot itemize because the standard deduction, nearly doubled in 2018 and indexed for inflation, now exceeds the sum of mortgage interest, property taxes, and other deductible expenses. Consequently, a growing share of owners lose the tax advantage that once applied broadly.
Despite these challenges, the MID remains one of the most valuable incentives for homeownership. Liddiard urges NAR members to master the deduction’s nuances so they can help clients make informed decisions when buying, selling, or refinancing. The mortgage‑interest deduction remains a cornerstone of federal housing policy, reinforcing the economic case for owning a home and supporting the overall market.
