Are Mortgage Insurance Premiums Deductible, This Year?

Owning a home is a significant milestone for most of us. Whether it’s buying a fixer-upper or your dream home, it can be a learning experience. That’s why, first-time homeowners should know about mortgage interest deductions, helpful government programs, and housing allowances that can be beneficial. If you are wondering, “Are mortgage insurance premiums deductible”, this blog will give you some clarity.

What is private mortgage insurance (PMI)?

Private mortgage insurance (PMI) is a type of insurance that protects the loan lender in case the borrower defaults on their mortgage loan. It’s typically required for borrowers who make a down payment of less than 20% of the home’s purchase price. Since PMI allows lenders to offer mortgages with lower down payments, it makes homeownership more accessible to buyers with limited funds.

PMI is added to conventional loans and is paid monthly with your home mortgage. You can request its removal once your loan-to-value ratio hits 80%. If you meet specific criteria, you might be able to deduct PMI on past tax returns too.

How did private mortgage insurance (PMI) and mortgage insurance premiums (MIP) begin?

Private mortgage insurance became classified as a form of mortgage interest under the Tax Relief and Health Care Act of 2006. Initially, the deduction was set to end in 2016, but it was extended to 2017. Subsequently, in 2019, legislation was passed to apply the deduction retroactively to payments made since 2017. In 2020, the deduction was extended to cover 2020 and 2021, with provisions for retroactive claims in 2018 and 2019.

However, the PMI deduction was not extended for 2022. And presently, it is unavailable for those who pay mortgage insurance premiums.

Are mortgage insurance premiums deductible, this year?

In 2019, Congress brought back a tax deduction for private mortgage insurance. This meant that homeowners paying for mortgage insurance could deduct the premiums for the tax years 2018, 2019, 2020, and 2021 if they itemized their deductions.

However, this deduction was not available for tax year 2022. Today, mortgage insurance premiums can’t be deducted unless the government decides to make the deduction retroactive. Depending on the new tax rules, there might be a chance to take the PMI deduction again.

What were the eligibility requirements for insurance premium deductions?

In the past years, you could get a deduction for mortgage insurance premiums if you met these conditions:

You paid premiums on mortgage insurance for a qualified mortgage after Dec. 31, 2006.
The mortgage was for buying your main home.
You itemized your deductions when filing income taxes.

But, if your income was high, the deduction decreased. For every $1,000 your income was over $100,000 ($50,000 if you’re married and file separately), the deduction dropped by 10%. If your income was over $109,000 ($54,500 if married and filing separately), you couldn’t get the deduction.

How much tax could an insurance deduction save, on average?

The savings you’d get from a PMI deduction depend on how much you’re paying for mortgage insurance and your tax situation. Typically, PMI costs range from 0.22% to 2.25% of your mortgage. A common estimate is about $50 per month for every $100,000 in loan amount.

For instance, let’s consider you buy a $320,000 home with a $20,000 down payment and finance $300,000. You might pay around $150 per month in PMI, totaling $1,800 yearly.

Suppose you’re married and filing jointly, earning $90,000 annually would put you in the 22% tax bracket in 2021. If you itemize deductions for mortgage, you could have saved $1,800 x 22%, which is $396 on your 2021 federal taxes.

Key takeaway

Most people who don’t put down at least 20 percent on a home have to pay mortgage insurance premiums. If you want to deduct PMI on your taxes, you need to itemize your deductions and meet certain eligibility criteria. That said, as of August 2022, it’s unclear if deductions for private mortgage insurance will happen or not in the near future.

To avoid future concerns about deductibility, you should focus on paying down your mortgage. Once you reach the requisite equity in your home, you can ask your lender to remove PMI from your mortgage.

FAQs

What are the different types of tax deductions, by IRS?

Tax deductions help reduce the amount of income that is subject to taxation, ultimately affecting how much you owe in taxes. There are two main types of deductions: standard and itemized.

Standard deduction: This is a set amount that lowers your taxable income, based on your filing status.

Itemized deduction: This involves listing specific expenses such as charitable donations or medical costs. If these expenses are significant, itemizing deductions might decrease your tax bill.

How can I get rid of PMI?

To cancel your PMI, you can ask your lender to remove it when your home’s loan-to-value ratio hits 80%. This date is usually on the PMI disclosure form you get when you get your mortgage. And, you need to send a written request.

Can you avoid paying PMI if your home value goes up?

Yes, if your home’s value increases, you can remove PMI. But, you’ll need a home appraisal and work with your lender to make sure your home’s new value raises your equity above 20%.

Can you deduct mortgage insurance premiums on rental property?

If an insurance tax deduction is available in a particular tax year, you may be able to deduct mortgage insurance premiums. Provided, you meet the PMI tax deduction requirements. According to the Internal Revenue Service, IRS, if you prepay premiums for multiple years, you can only deduct the portion that applies to each specific year of coverage.

Are mortgage insurance premiums deductible? Do I qualify? was last modified: November 6th, 2025 by Ramona Sinha

Written by Ramona Sinha. November 7, 2025

Ramona is the Senior Content Writer for Kukun. This experienced blogger uses simple and succinct words to decipher the complex phenomenon called life. She has written articles covering a broad range of topics, such as real estate, lending and mortgage, finance, business, taxation, home designs, home improvement projects, decor concepts, and more. An avid traveler, she’s a digital nomad at heart and an animal lover from the depth of her soul.