Gaming the Mortgage Interest Deduction Under the New Tax Law
The rise in the standard deduction means far fewer people will be deducting mortgage interest.


Note: The editors of Kiplinger's Personal Finance magazine and the Kiplinger Tax Letter are answering questions about the new tax law from subscribers to our free Kiplinger Today daily email. See other reader Q&As about the new tax law, or submit your own question.
Question: My wife and I owe about $250,000 on our home mortgage, the interest on which we have always deducted along with our other itemized deductions. Now that Congress has doubled the standard deduction, though, we’ll stop itemizing and lose the benefit of the mortgage interest deduction.
We also own an apartment building free-and-clear and are thinking of borrowing $250,000 against it, and using the money to retire the home mortgage. Then, we could deduct the interest on the apartment loan to offset our rental income. Will that work?
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Answer: Nice try, but ... The deductibility of interest turns on the use of the borrowed money, not the security for the loan. While interest on money borrowed to buy or improve a rental property can be deducted against rental income, money used for a personal purpose, such as paying off a home mortgage, is nondeductible.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

-
These Stocks Dipped in 2025. Do They Have Value?
If you are looking to add new long-term positions to your portfolio, as you should, this is the time to examine stocks that the market shuns.
-
Striking Gold (or Gas): A Financial Pro Unpacks the Nuances of Energy Investing
Investing in the energy industry, particularly oil and gas, involves understanding the facts about how projects generate returns through cash flow and long-term asset building, while also being aware of the risks.
-
New Tax Rules: Income the IRS Won’t Touch in 2025
Income Taxes From financial gifts to Roth withdrawal rules, here’s what income stays tax-free under the new Trump 2025 tax bill, and some information on what’s changed.
-
Three Popular Tax Breaks Are Gone for Good in 2026
Tax Breaks Here's a list of federal tax deductions and credits that you can't claim in the 2026 tax year. Plus, high-income earners could get hit by a 'surprise' tax bill.
-
Tax Brackets 2025 Quiz: How Much Do You Know?
Quiz Test your knowledge of IRS rules that impact how much money you keep in your wallet.
-
Retirees Face a Growing Capital Gains Tax Trap: What's Next?
Home Sales A changing housing market and unchanged IRS exclusion amounts can add up to a headache for many homeowners. Will Congress offer a fix?
-
New York Inflation Refund Checks Are Coming Soon: What to Know Now
Tax Relief Inflation relief checks are on the way for over 8 million New York taxpayers. Here's a full breakdown of who gets a payment and when you may expect yours.
-
Mortgage Refinance in 2025? These Tax Breaks Can Boost Your Savings
Tax Breaks Refinancing your mortgage comes with tax implications, but also opportunities to deduct certain expenses on your return.
-
IRS Phasing Out Paper Checks: What Happens After September 30?
Tax Changes Avoid delays when IRS tax refunds and Social Security paper checks are cut off. Here’s what to know.
-
The Most Tax-Friendly States for Investing in 2025 (Hint: There Are Two)
State Taxes Living in one of these places could lower your 2025 investment taxes — especially if you invest in real estate.