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rlloyd123
New Member

Is it true that you can only deduct mortgage interest on 13 monthly mortgage payments? I was told by my mortgage company that this is a government rule.

my mortgage company sent a tax statement showing a much lower amount of mortgage interest paid than what the monthly statement shows.  I called and they said this is because i made more than 13 mortgage payments and i can't deduct interest on more than 13 payments.

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DianeW
Expert Alumni

Is it true that you can only deduct mortgage interest on 13 monthly mortgage payments? I was told by my mortgage company that this is a government rule.

Any interest paid and applied to your mortgage in the current year is allowed as a deduction.  However, see the "prepaid interest" note below from the IRS.

If you payments are designated for future months there is a limit to the amount you can deduct.

IRS Publication 936-Home Mortgage Deduction (Click the link for more information)

  • Prepaid interest. If you pay interest in advance for a period that goes beyond the end of the tax year, you must spread this interest over the tax years to which it applies. You can deduct in each year only the interest that qualifies as home mortgage interest for that year. 

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2 Replies
DianeW
Expert Alumni

Is it true that you can only deduct mortgage interest on 13 monthly mortgage payments? I was told by my mortgage company that this is a government rule.

Any interest paid and applied to your mortgage in the current year is allowed as a deduction.  However, see the "prepaid interest" note below from the IRS.

If you payments are designated for future months there is a limit to the amount you can deduct.

IRS Publication 936-Home Mortgage Deduction (Click the link for more information)

  • Prepaid interest. If you pay interest in advance for a period that goes beyond the end of the tax year, you must spread this interest over the tax years to which it applies. You can deduct in each year only the interest that qualifies as home mortgage interest for that year. 
Opus 17
Level 15

Is it true that you can only deduct mortgage interest on 13 monthly mortgage payments? I was told by my mortgage company that this is a government rule.

As a practical matter, I think the bank is correct about the 13 month rule.  You could pay your January 1, 2017 interest on Jan 2, and your January 1, 2018 interest on December 31, and still be paying 2017 interest.  (Your Jan 1, 2018 payment includes interest that accrued from 12/1-1/1 since interest is charged in arrears on mortgages.)

However as the regulation states, prepaid interest must be allocated over the years to which is applies, even if paid ahead of time.
*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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