PMI / Mortgage Insurance Deduction Calculator
Starting in 2026, the One Big Beautiful Bill Act permanently revived the mortgage insurance premium deduction — dead since 2021. Conventional PMI, FHA mortgage insurance, VA funding fees, and USDA guarantee fees are deductible again as home mortgage interest on Schedule A, if you itemize. It phases out fast: gone completely once AGI exceeds $109,000 ($54,500 married filing separately) — not $110,000 like most articles say. Enter your numbers to see what's deductible and what it saves. Everything runs in your browser — nothing is uploaded.
Estimate for general guidance only — not tax advice. Figures use the 2026 federal brackets and standard deductions (single/MFS $16,100 / married filing jointly $32,200 / head of household $24,150). Does not model loans above the $750,000 acquisition-debt cap, rental-property mortgage insurance (Schedule E, out of scope), or the general itemized-deduction §68 "2/37 rule" (it never touches this deduction — see below). Verify with the IRS or a tax professional.
Five things people get wrong about the 2026 PMI deduction
1. The cutoff is $109,000, not $110,000. Most articles round the phaseout to "$100k to $110k." The statute reduces the deduction by 10% for every $1,000 or fraction thereof that AGI exceeds $100,000 — so the tenth and final step is triggered by any AGI above $109,000, not at $110,000. Married filing separately: gone above $54,500, not $55,000.
2. There's no separate, higher threshold for married couples. Married filing jointly shares the exact same $100,000 starting point as a single filer or head of household — only married filing separately differs ($50,000, $500 steps). A married couple hits the same phaseout as a single person at the same income.
3. This wasn't a new law — it's an old one switched back on. The One Big Beautiful Bill Act didn't rewrite the mortgage insurance rules; it disabled the termination clause that had let the deduction expire after 2021. The phaseout and the pre-2007-contract rule are unchanged, word for word, since 2006 — and still aren't adjusted for inflation.
4. VA and USDA fees are deducted better than FHA's upfront premium, not worse. FHA's upfront mortgage insurance premium (UFMIP) and any single-premium PMI must be spread ratably over the shorter of your loan term or 84 months. A VA funding fee or USDA guarantee fee is exempt from that rule — fully deductible the year you pay it, even as a lump sum at closing.
5. You still have to itemize. Unlike the 2026 charitable-giving change, there is no non-itemizer version of this deduction. If your Schedule A total (mortgage insurance plus mortgage interest, SALT, charitable gifts) doesn't beat your standard deduction, the premiums qualify on paper but save you $0.
How the 2026 mortgage insurance premium deduction works
The mortgage insurance premium deduction (IRC §163(h)(3)(E)) let homeowners treat PMI and similar premiums as deductible mortgage interest. It expired after 2021. The One Big Beautiful Bill Act (§70108, signed 2025) brought it back permanently, effective for tax years beginning after December 31, 2025 — so tax year 2026 is the first year it applies again. Rather than writing new rules, Congress simply disabled the old law's expiration clause, leaving everything else — including the phaseout below — exactly as it was.
1. Who and what qualifies. Premiums for conventional PMI, FHA mortgage insurance (MIP and UFMIP), VA funding fees, and USDA (Rural Housing Service) guarantee fees all count, as long as they relate to acquisition debt on your main or second home and the insurance contract was issued after December 31, 2006.
2. The AGI phaseout. The deductible amount is reduced by 10% for every $1,000 (or fraction of $1,000) that your AGI — not modified AGI — exceeds $100,000. That means it's completely gone once AGI passes $109,000. Married filing separately uses $50,000 and $500 steps, eliminated above $54,500. Married filing jointly gets no special treatment here — same $100,000 start as everyone else except MFS.
3. Prepaid premiums are spread out — except VA and USDA. If you pay a lump sum upfront (FHA's UFMIP, or a single-premium PMI policy), you can't deduct it all in one year. It's amortized ratably over the shorter of your loan's term or 84 months, starting the month you got the insurance. Refinance or pay off the loan early, and the remaining unamortized balance is simply lost — not deductible at payoff. A VA funding fee or USDA guarantee fee skips all of this: fully deductible in the year paid, lump sum or not.
4. You must itemize. The premiums are added to the "Interest You Paid" section of Schedule A (line 8d on the last form the deduction was in effect, 2021 — the 2026 form isn't final yet). If your total itemized deductions don't exceed your standard deduction, the deduction produces $0 in real tax savings.
What doesn't touch this deduction. The new §68 "2/37 rule" that trims itemized deductions for top-bracket filers only kicks in well above the income where this deduction has already hit $0 — so it's irrelevant here, unlike for SALT or charitable giving. Loans above the $750,000 acquisition-debt cap and rental-property mortgage insurance (which is a Schedule E business expense, not this deduction) are both out of scope for this tool.
Refinancing or buying a home this year? See the same law's other Schedule A changes: the SALT deduction cap calculator and the charitable deduction calculator. Bought a car instead? Check the car loan interest deduction calculator.
A worked example: the FHA UFMIP amortization
David is single with a $90,000 AGI. He closed on an FHA loan in June 2026 with a $6,125 upfront mortgage insurance premium (UFMIP) and a 30-year (360-month) term, plus $1,600 of annual MIP paid through the rest of the year. Here's how 2026 treats it:
- Amortize the UFMIP: the $6,125 is spread over the shorter of 360 months or the statutory 84-month cap — so 84 months, at $72.92/month. From June through December is 7 months, so $72.92 × 7 = $510.42 is deductible in 2026. The rest carries into future years.
- Add the recurring MIP: $1,600 (paid as-you-go) + $510.42 (the 2026 UFMIP slice) = $2,110.42 qualifying premium.
- The AGI phaseout: David's $90,000 AGI is under the $100,000 threshold, so none of it phases out — the full $2,110.42 is deductible on Schedule A, assuming he itemizes.
If David had instead paid a $8,000 VA funding fee with no monthly premium, the entire $8,000 would be deductible in 2026 — no 84-month spreading, because VA fees are exempt from the amortization rule.
Common questions
Is PMI tax deductible in 2026? Yes — the One Big Beautiful Bill Act permanently revived the deduction for tax years beginning after 2025, after it had lapsed since 2021.
What's the actual AGI cutoff? $109,000 ($54,500 married filing separately) — not $110,000/$55,000 as most articles say, because of a "$1,000 or fraction thereof" rounding rule.
Do married couples get a higher threshold? No. Married filing jointly shares the same $100,000 starting point as single and head of household filers.
Is FHA's upfront premium deducted differently than a VA funding fee? Yes. FHA UFMIP and single-premium PMI amortize over the shorter of the loan term or 84 months. VA funding fees and USDA guarantee fees are fully deductible the year paid — no amortization.
Do I need to itemize? Yes — this is a Schedule A itemized deduction only, with no non-itemizer alternative.
Does a pre-2007 mortgage insurance contract qualify? No. Only contracts issued after December 31, 2006 qualify — a restriction that's still on the books.
Is anything saved or uploaded? No. The tool is fully client-side — your numbers never leave your browser.
Sources: Public Law 119-21 §70108, enrolled statute text (govinfo); 26 USC §163(h) (Cornell LII); Treas. Reg. §1.163-11; IRS, Publication 936; IRS, Instructions for Form 1098; Rev. Proc. 2025-32 (2026 standard deduction).