A first mortgage in Chesterfield, Henrico or Hanover comes with a tax question that lenders and agents are not allowed to answer for you: will you actually get a deduction for the interest and points? The answer depends on whether you itemize, how large the loan is and a list of conditions for points. This guide summarizes what the IRS says in Topic 505 and Publication 936 as we read them in October 2026. It is general information, not tax advice, and tax law changes, so check the current IRS pages or a tax professional before you rely on it.
The rules in one table
Home mortgage interest, as the IRS describes it
| Item | What the IRS says |
|---|---|
| Where you claim it | As an itemized deduction on Schedule A; you must itemize rather than take the standard deduction |
| Loan limit, debt after December 15, 2017 | $750,000 combined ($375,000 if married filing separately) |
| Loan limit, older debt | $1,000,000 combined ($500,000 if married filing separately) |
| Reporting | Your lender sends Form 1098, Mortgage Interest Statement |
| Second homes | Must be used as a home for more than the greater of 14 days or 10 percent of the days you rent it |
The itemizing requirement is the part buyers miss. If your itemized deductions are lower than the standard deduction, you get no tax benefit from the interest, even though you paid it. Add up your expected mortgage interest, real estate taxes and other itemized items before you count on a deduction when you set your budget.
Points and the conditions behind them
The IRS says points paid on a loan secured by your main home can be treated as mortgage interest when you are the buyer, but to deduct them fully in the year paid you must satisfy a list of conditions. Among them: the loan is secured by your main home, points are customary in your area, the amount is not excessive, you use the cash method, the points are a percentage of principal, they are clearly shown on the settlement statement, and the funds you provided at or before closing plus any points the seller paid were at least as much as the points charged. Points that do not meet the list are generally deducted over the life of the loan. Ask your tax preparer which applies to you.
What it means for a Richmond-area purchase
Real estate tax is the other large housing cost on Schedule A, and it varies by locality. Our guide to 2026 tax rates across the Richmond metro and our example of the same $475,000 house with six tax bills show how the locality changes the annual figure, and the due dates by locality tell you when bills arrive. Buyers over 65 or with a disability should also check locality tax relief programs.
The $750,000 limit matters most at the upper end of the market. If you are buying in Short Pump, Midlothian or Woodlake with a large loan, find out how much of it falls under the limit. The Virginia Housing price cap guide is a separate program with its own rules and does not change the IRS limit.
Real estate tax is billed by the locality and the dates differ, so check your own bill. Chesterfield County posts its due dates and payment options on its real estate tax page. Ask your tax preparer how real estate tax paid is treated on your return, and keep your payment confirmations with your Form 1098 and your closing statement.
A short checklist for buyers
Ask your lender for the loan estimate and note any points. Ask the settlement agent to show points as a separate line on the statement. Keep the Form 1098 you receive in January. And before you decide how much house to buy based on a tax benefit, run your own numbers with a tax professional. Agents on our Chesterfield and Henrico pages can point you to local lenders and settlement companies.
Get our closing-timeline checklist
Buying this fall? Ask us for the Mission Realty closing-timeline checklist, which shows when loan documents, points and closing costs come due. Call (804) 601-4960, or start with our neighborhood guides.
Frequently asked questions about the mortgage interest deduction
Is mortgage interest deductible on my main home?
The IRS says interest on a loan secured by your main home can be deducted as an itemized deduction on Schedule A, subject to limits.
What is the limit on mortgage debt for the deduction?
For debt taken out after December 15, 2017, the IRS says $750,000 combined ($375,000 if married filing separately). Older debt has a $1,000,000 limit.
Do I have to itemize to deduct mortgage interest?
Yes. The IRS says you claim it on Schedule A, which means itemizing instead of taking the standard deduction.
Can I deduct points when I buy a home?
The IRS says points on a loan secured by your main home can be treated as mortgage interest for the buyer. To deduct them fully in the year paid you must meet a list of conditions, including that they are clearly shown on the settlement statement.
What is Form 1098?
The Mortgage Interest Statement your lender sends each year showing the interest you paid.
Does a second home qualify?
It can, if you use it as a home for more than the greater of 14 days or 10 percent of the days you rent it, per the IRS.
Does the Virginia Housing price cap change the IRS limit?
No. That program has its own rules. The IRS limit is set by federal law.
Should I buy more house for the tax deduction?
Not on that basis alone. Whether you benefit depends on whether you itemize. Run your numbers with a tax professional first.
