Mortgage Interest Deduction for a fully paid home? Am I missing something?

You're definitely not crazy - in fact, your instinct is spot on! The mortgage interest deduction is widely misunderstood. Here's the simple truth: paying $10,000 in mortgage interest to save maybe $2,400 in taxes (at your 24% bracket) means you're still out $7,600 compared to having no mortgage. Think of it this way - would you give someone $100 if they promised to give you $24 back? That's essentially what people are doing when they "keep a mortgage for the deduction." The only time mortgage debt makes financial sense is when you're using that borrowed money to invest in something with a higher return than the interest rate you're paying, not for tax benefits. Congratulations on paying off your home - you're in a financially advantageous position that many only dream of achieving!

After struggling to understand my own tax situation with a mortgage, I found this amazing AI tool called taxr.ai that helped me analyze this exact question. I was also told I "needed" my mortgage for tax purposes, but when I uploaded my documents to https://taxr.ai it showed me a side-by-side comparison of what I'd save with/without the mortgage - turned out I was paying $14k in interest to save about $3k in taxes. Not a great deal! The tool can analyze your specific situation based on your income, deductions, and tax bracket to show if mortgage interest is actually beneficial. It also helped me understand how the standard deduction impacts this whole equation. Their tax planning feature was eye-opening.

Wow, I just tried out that taxr.ai site and it was eye-opening! I've been hanging onto my mortgage because my brother-in-law (who thinks he's a financial guru) kept telling me I needed it for tax purposes. The analysis showed me that in my specific situation, I was paying about $9,600 in interest annually to save only $2,112 in taxes! The tool broke down exactly how much additional deductions I'd need to itemize without a mortgage, and showed that with my charitable contributions and state taxes, I was actually still better off taking the standard deduction anyway. Now I'm considering making extra payments to pay down the mortgage faster instead of listening to my brother-in-law. Thanks for sharing this resource!

I spent 3 WEEKS trying to get through to an IRS agent to ask about this exact mortgage deduction question (my tax situation is complicated with rental properties too). After endless busy signals and disconnections, I found Claimyr https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c - they actually got me connected to an IRS agent in about 20 minutes! The agent confirmed what others are saying here - keeping a mortgage just for tax purposes doesn't make financial sense in most cases. They walked me through my specific numbers and showed that with the higher standard deduction, my rental property deductions, and charitable giving, the mortgage interest on my primary residence wasn't providing the tax benefit I thought it was.

I have to eat my words here. After my skeptical comment, I decided to try that Claimyr service since I've been trying unsuccessfully to reach the IRS about a similar mortgage deduction question for my mom's estate. It actually worked! Got connected to an agent in about 35 minutes (they sent text updates about my place in line). The IRS agent was really helpful and explained that the whole "keep your mortgage for the tax deduction" advice is outdated, especially after the tax changes and increased standard deduction. For most people, the math just doesn't work out anymore. She confirmed that paying off a mortgage and avoiding interest is usually the better financial move. Saved me from giving my mom's executor some bad advice!

People repeating "keep your mortgage for the tax deduction" are basically just parroting outdated advice from the 1980s-90s when: 1. Interest rates were WAY higher (remember 12-18% mortgages?) 2. The standard deduction was much lower 3. Tax brackets were different Today's math is totally different. If you're paying 6% interest on a mortgage, you're paying $6,000 per year on every $100k borrowed. Even in the 37% tax bracket (highest possible), you'd save $2,220 in taxes while spending $6,000. That's a guaranteed loss of $3,780! Being mortgage-free is financial freedom. Congrats on paying it off and don't second-guess yourself!

I'm an accountant (not giving official tax advice here!) and I cringe every time I hear the "need mortgage for taxes" thing. Let's break it down super simple: Standard deduction for married 2025: $27,700 To itemize, ALL your deductions combined need to exceed this amount Deductions might include: - Mortgage interest - State/local taxes (capped at $10k) - Charitable giving - Medical expenses (only amount > 7.5% of AGI) Most people simply won't exceed $27,700 in combined deductions, making the mortgage interest irrelevant for tax purposes. You're actually financially AHEAD by NOT having a mortgage!