How the Mortgage Interest Tax Deduction Works

The mortgage tax deduction can potentially save you thousands of dollars, which could help furnish your home.
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Compared to renting, owning a home gives you the benefit of an investment. There's another benefit that you can't get from renting comes around every year during tax time, too: the mortgage tax deduction, which can potentially save you thousands of dollars.

When you have a mortgage on your home, you can deduct the interest from that mortgage on your taxes. It also applies if you pay interest on a condo, co-op, mobile home, boat, or recreational vehicle -- as long as the property is used as a residence.

The mortgage interest tax deduction is designed to make help make buying and owning homes more affordable for typical Americans. Although this deduction has been around for decades, it's also currently a topic of controversy with financial experts and government officials. Keep reading to find out why.