I am thinking of refinancing my home loan (which I last refinanced 7 years ago). If I do this, will I be limited to the $750K interest deduction limits or will it stay at $1,000,000 in 2021?
For 2021, the limit is the mortgage interest paid on the first $750,000 of indebtedness for a married couple or $375,000 if single or married filing separately.
However, tax law do change quickly these days.
**Mark the post that answers your question by clicking on "Mark as Best Answer"
the rule is based on the date the loan was taken out.....so you are limited to $750,000 for full interest deduction.
however, over time, all the interest will become deductible as the loan amortizes.
the IRS assumes that the part over $750,000 is what amortizes first so what is deductible is $750,000 / loan balance * interest. That percent will continue to increase towards 100% as the 'loan balance' decreases towards $750,000.