Can a Married Couple Deduct Mortgage Interest on Two Homes?

Every tax return, whether filed by an individual or by a married couple jointly, is allowed to include a mortgage interest deduction on two homes. However, the benefit is available only to taxpayers who itemize deductions. People who do not itemize deductions cannot deduct mortgage interest. In addition, the itemized deduction for mortgage interest has several limitations.


You are entitled to deduct the mortgage interest on your primary residence and one other home that you also use as a residence for some portion of the year. You do not have to occupy the second home if you don’t rent it or make it available for sale.

Maximum Amount

The interest you are allowed to deduct in a single year for mortgages to acquire primary and second homes is limited to the first $1 million of borrowing on the combined properties. Debt for construction, including home improvements, counts toward this limit. For married individuals filing separate tax returns, the amount is reduced to the first $500,000 of debt.


A home that is under construction qualifies as a second home for which you may deduct the interest, up to the maximum amount per tax return. However, the construction period cannot exceed 24 months. Deducting the mortgage interest for a second home under construction is limited to the interest paid during any 24-month period after construction begins. You don’t have to start counting on the first day of construction.

Home Equity

When you borrow against the equity in your primary residence or second home, the interest is deductible on the first $100,000 of indebtedness. For married couples filing separately, this figure is $50,000. One of the homes must secure the debt and a legal liability must exist for you to pay the interest. The deduction is also limited to an amount you actually pay. You cannot deduct interest that has merely accrued unpaid.

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