Private mortgage insurance — the extra monthly cost tacked onto a loan when a buyer puts down less than 20% — spent years cycling on and off the list of deductible expenses. Under the One Big Beautiful Bill Act, PMI is treated as deductible mortgage interest again starting with the 2026 tax year.
What PMI is, quickly
Lenders generally require private mortgage insurance when a conventional loan's down payment is below 20% of the home's value, protecting the lender (not the borrower) if the loan defaults. It's a real monthly or upfront cost, often ranging from a fraction of a percent to around 1-2% of the loan amount annually, depending on the down payment and credit profile.
The back-and-forth history that made this confusing
PMI deductibility has lapsed and been retroactively reinstated by Congress multiple times over the past decade, which is exactly why so many homeowners are unsure whether it currently qualifies. The One Big Beautiful Bill Act settles this for the near term by folding PMI into the qualified mortgage interest deduction starting with tax year 2026.
How it's treated once deductible
When PMI qualifies, it's deducted as part of your itemized mortgage interest deduction, subject to the same rules and debt limits as the interest itself — meaning it only helps if you itemize rather than take the standard deduction, and it's still constrained by the loan balance limits on qualified home acquisition debt.
Income limits still apply
PMI deductibility phases out once adjusted gross income exceeds $100,000 (roughly double for married couples filing jointly, per current guidance), reduced by 10% for every $1,000 of AGI above that threshold — meaning the deduction disappears entirely well before AGI reaches $110,000 for most single filers. Homeowners with income above this range will find the deduction reduced or eliminated even though the provision itself has returned.
Frequently asked questions
Does this apply to FHA mortgage insurance premiums too, or only conventional PMI?
The deduction has historically covered qualifying mortgage insurance premiums broadly, including FHA and certain other government-backed loan insurance, not just conventional PMI — confirm your specific loan type against current IRS guidance.
Where does my lender report the PMI I paid?
Mortgage insurance premiums paid are typically reported in Box 5 of Form 1098 from your loan servicer.
Is this deduction permanent now?
It's included as part of the broader mortgage interest deduction changes under the One Big Beautiful Bill Act; confirm the current expiration schedule before assuming it applies to a specific future tax year.