PMI Premiums are Permanently Tax-Deductible!!

 


PMI Premiums Are Permanently Tax-Deductible

Once upon a time, private mortgage insurance (PMI) premiums were deductible—until Congress let that benefit expire at the end of 2021. Homebuyers who put down less than 20% on a conventional loan could no longer claim PMI as qualified mortgage interest, making that $200–$400 monthly line item a pure out-of-pocket cost.

Enter the One Big Beautiful Bill Act, signed July 4, 2025: it **restores—and locks in—**the deduction of PMI premiums as if they were mortgage interest, permanently. That means if you’re in the 24% federal tax bracket and paying $300/month in PMI, you can now save about $72 on your federal tax bill each month .

Before the Act:

  • $300/month PMI × 12 = $3,600 in annual premiums

  • $3,600 was not deductible on Schedule A, costing borrowers the full amount out-of-pocket.

After the Act:

  • $3,600 in PMI is deductible as mortgage interest.

  • At a 24% tax rate, you save $864/year (or about $72/month), freeing up cash flow for down-payment top-ups, home improvements, or monthly living expenses.

What Homebuyers Should Do Now

  • Talk with your CPA about claiming PMI on Schedule A to capture these new, permanent savings.

How Realtors Can Add Value

  • Create a “PMI Before vs. After Tax” One-Pager: Show first-time buyers exactly how much they’ll save each month—and turn PMI from a sticking point into a selling feature.

By sharing this clear “before and after” story, you’ll help buyers see how the Big Beautiful Bill Act transforms PMI from a necessary evil into a tax-smart tool—making homeownership more affordable for everyone.

-Nate Carver, Premier Lending, Inc.

About Between Two Doors
Between Two Doors is a podcast where I talk with Realtors about their journey, aiming to connect home buyers and sellers with agents on a more personal level. I ask “right brain” questions that go beyond transactions, focusing on the experiences, values, and passions that make these professionals great at what they do.

Listen to more episodes at: https://www.betweentwodoors.com

Sponsored by:
Premier Lending, Inc.
https://www.natecarver.com

NMLS Numbers:
NMLS: 2004738
Licensed by the Department of Financial Protection and Innovation (DFPI). Equal Housing Opportunity.
https://www.nmlsconsumeraccess.com

📞 Contact: 972-832-5761

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