Tinamarie (and others), the reason that only interest + expenses can be deducted is that your home is an asset and your mortgage is basically a form of mandatory "cash account" against your asset that turns asset value into cash that must be repaid on fixed intervals. So when you pay your mortgage, you are effectively transferring money from your bank account to your "House account" which are both assets. When you sell the house, you can then receive the value of the money transferred to the house account in the form of cash. The house account is not an expense.
However, the money you pay in interest IS an expense because it's money being transferred to the bank that you'll never see again. Therefore, it can be written off.
