Use of Mortgage Interest Deduction Depends on Where You Live

By Sari R. Updated on 5/6/2013

The mortgage interest deduction varies drastically across the nation; there are concentrations on the West and East Coast as well as in areas with higher property values.  The average size of the deduction varies widely from area to area nationwide.  The federal government is constantly looking for ways in which they can reduce the deficit, and the mortgage interest deduction is now a topic of interest, as are other tax exemptions and deductions.

Homeowner tax filers who itemize deductions can subtract mortgage interest paid from their income.  Filers deducted around $360 billion in interest in 2011; this led to the federal government losing around $72 billion in tax revenue.

While this is significant, less than half of all homeowners nationwide claim the mortgage interest deduction.  As the mortgage size grows, so does the tax benefit.  The amount of debt eligible for this deduction, however, is a maximum of $1 million.

The percentage of total filers who claim the mortgage interest deduction is less than a fourth; this statistic widely varies depending on the state.  In West Virginia, around fifteen percent of individuals claim the mortgage interest deduction, and in Maryland, around thirty-seven percent of individuals claim the mortgage interest deduction.

The national average deduction of all tax filers was $2,713 in 2010.  However, this average includes those who don’t take the deduction.  In addition, these average amounts range from $1,192 in North Dakota to $4,580 in Maryland.