Tax system isn't dividing the points paid by the life of the mortgage (loan life). It is added entire amount to the interest paid. Why?

[RobertG]

You can deduct points for your main home, if all of the following conditions apply:

• They're discount points (see the definition)
• The mortgage is used to buy, build, or improve the home, and the home is the collateral for the loan
• Paying mortgage points is a customary practice in your area and the points you paid aren't excessive for your neighborhood
• The points were paid directly to the lender, either by you or the seller (no borrowing)
• Your down payment, plus any points the seller paid, exceed the points paid amount
• You use the cash method of accounting (almost all taxpayers do)
• The points are calculated as a percentage of the mortgage principal (not required on home-improvement loans)
• The points are clearly itemized on your settlement statement as points (not required on home-improvement loans)

If you meet all the above criteria, you can either deduct all your points in the year you paid them or deduct them in equal increments over the life of the loan. Either way, you'll need to itemize to get the deduction.

[Anonymous]

were the points paid on a mortgage to acquire your main residence?  Then the points are fully deductible in the year you took out the mortgage.  if on a refi, second home, home equity loan,  or investment property then some details are missing from your entries. however, on your main residence, you can elect to amortize. IRS Ltr Rul 199905033

for example on a refi, second home. or home equity loan used to improve the home you would have to check the box that the points must be amortized using the Home Interest Worksheet. Then TT would take you through the additional questions to compute the amortization.

for investment property, the points would need to be entered through the asset entry worksheet. type of asset code L. 

if the mortgage interest limitation is in effect, for example, you take out a $1,500,000 mortgage in 2019 to buy your main home and pay points of 1%   or $15,000, 1/2 of the points are not deductible at all (the mortgage is twice the loan limit of $750,000)