Mortgage Interest Expense

[amarwah85]

Hi All,

I wanted to know if mortgage interest payments corresponding to an individual's principal place of residence(home owner) for a year are considered as an eligible expense for deduction from income ?

[TurboTaxBrenda1]

Mortgages can be considered money loans that are specific to the property. If they are incurred for the purpose of earning income by renting property to tenants, the interest portion of the mortgage is deductible on line 8710 of the T776 Rental Income form.

Only the interest portion of the mortgage is deductible, and the interest is only deductible in the original term of the loan. If a lump sum amount was paid to reduce the interest rate on a mortgage, only a pro-rated portion of that lump sum is deductible in the tax year it was paid.

Note that if you are renting out part of your principal residence, you are only eligible to claim a portion of the mortgage interest.