View other TPC estimates on the distribution of tax expenditures.
The deduction for mortgage interest on owner-occupied homes is one of the largest individual income tax expenditures provided to households. The Office of Management and Budget estimates the mortgage interest deduction to be worth nearly $90 billion in fiscal year 2011.
The following tables present a distributional analysis of various options to restructure the mortgage interest deduction. The options range from a complete repeal of the mortgage interest deduction to replacing the mortgage interest deduction with a revenue-neutral credit. Estimates are shown in calendar year 2015 against both current law and current policy and in calendar year 2011 against current law.
A detailed research report on options to reform the mortgage interest deduction can be found here.
Options to Restructure Mortgage Interest Deduction in 2015 |
Repeal Mortgage Interest Deduction |
| 2015 versus Current Law | | 2015 versus Current Policy |
| | | | | |
Limit Eligible Mortgages to $500,000 on Primary Residence |
| 2015 versus Current Law | | 2015 versus Current Policy |
| | | | | |
Replace Deduction with 12% Refundable Credit, Limit Eligible Mortgages to $500,000 |
| 2015 versus Current Law | | 2015 versus Current Policy |
| | | | | |
Replace Deduction with 12% Nonrefundable Credit, Limit Eligible Mortgages to $500,000 |
| 2015 versus Current Law | | 2015 versus Current Policy |
| | | | | |
Replace Deduction with 15% Nonrefundable Credit, Limit Eligible Mortgages to $500,000 |
| 2015 versus Current Law | | 2015 versus Current Policy |
| | | | | |
Replace Deduction with 20% Nonrefundable Credit, Limit Eligible Mortgages to $500,000 on Primary Residence |
| 2015 versus Current Law | | 2015 versus Current Policy |
| | | | | |
Replace Deduction with 27.9% Nonrefundable Credit, Limit Eligible Mortgages to $500,000 on Primary Residence |
| 2015 versus Current Law | | 2015 versus Current Policy |
| | | | | |
Options to Restructure Mortgage Interest Deduction in 2011 |
Repeal Mortgage Interest Deduction |
| 2011 versus Current Law | | |
| | | | | |
Limit Eligible Mortgages to $500,000 on Primary Residence |
| 2011 versus Current Law | | |
| | | | | |
Replace Deduction with Revenue-neutral Nonrefundable Credit |
| 2011 versus Current Law | | |
| | | | | |
Replace Deduction with Revenue-neutral Refundable Credit |
| 2011 versus Current Law | | |
| | | | | |
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