mortgage cost amortization, earlier than loan end date

[jennbeckman]

Hi, I purchased a rental property in 2023. For buying that rental property, I got a 30-year mortgage from bank. I also paid some mortgage costs such as appraisal fee, points, and origination fee. I understand that these costs can be amortized over the life span of mortgage. However, I plan to refinance in a couple of years. Now my question is that instead of amortizing the mortgage cost over 30 years, can I amortize the mortgage cost over 2 or 3 years since I will reference before the term date of my mortgage?
Note that this mortgage is for a rental property, not for my primary residence.

[DianeW777 · Accepted solution]

No, these fees must be amortized and deducted over the life of the mortgage.  However, when a mortgage loan is refinanced and it is with a different lender, then any remaining points that have not been deducted under the first lender can be deducted in the year of refinance.

If a mortgage loan is refinanced with the same lender, any remaining points must be added to the points on the new loan if applicable, then divided by the loan term to determine the monthly amount you can deduct.  If there is a full year of mortgage payments then it would be 12 months deduction as points. For the first year it would be the number of months remaining in the year beginning with the first month payments begin and ending in December of that year. 

• What can I deduct when refinancing rental property?

Sign into your TurboTax Online account > in the Search box upper right type rentals > Jump to rentals

1. Edit beside the rental
2. Scroll to Mortgage Interest and select Edit
3. Continue to answer the questions about Refinance and the list of expenses will populate
4. TurboTax will handle the rest and the below article has some insight about the expenses