Home Mortgage Interest Credit Act of 2026

Key Points

• The bill creates a brand new tax credit that directly reduces what homeowners owe in taxes, up to $2,000 a year, based on interest paid on their home loan.
• Only interest on loans used to buy, build, or substantially improve your main home counts, so second homes and rental properties don't qualify.
• The $2,000 credit shrinks for higher earners, phasing out above $300,000 for joint filers, $200,000 for heads of household, and $150,000 for everyone else.
• Homeowners can't double dip: if you use this credit for your mortgage interest, you can't also deduct that same interest under the existing mortgage interest deduction.
• If enacted, the changes would start with the 2027 tax year, and the $2,000 cap and income limits would rise with inflation after that.