I Love the Mortgage Interest Deduction

Last week I received my income tax refund. What other day of the year do you get thousands of dollars given to you in exchange for the relatively short amount of time it takes to file your taxes? Yes, I know it was money I overpaid to begin with, and some will argue I should change my W-4 to lessen my overpayments, but for the paranoid like me, I’d rather get money back than have to owe and pay penalties.

Only the last couple of years have I had significant refunds. I owe that to the mortgage interest that I can now deduct. What a benefit of homeownership that has turned out to be: before I owned this house, I’d owe or get refunded less than $300 every year. Now, the refund I get is equivalent to about 2.5 house payments. I find that to be amazing.

I bring all this up because President Obama seems to be thinking about reducing the amount of mortgage interest that can be deducted by high-income people. I don’t want to get political, but since I’m not one of those high-income people, I have no problem with this. If I was fortunate enough to be one of them, I’d be disappointed, but I would understand the reasoning. However, there are those who say this will lead to a decrease in housing sales, which confuses me. The mortgage interest deduction currently applies to the house that is your main residence. Everyone needs somewhere to live. So because they end up not being refunded as much money as they are used to, they will instead become renters?

The bottom line is that the mortgage interest deduction is an unheralded perk of homeownership, and I don’t think it gets enough prominence from the pro-home-buying people (whoever they may be).