(302) 892-2811
info@pikecreekloans.comLoading
November 3, 2026
The most commonly deductible mortgage-related expenses for homeowners are mortgage interest, discount points paid at closing, and state and local property taxes — but each comes with specific eligibility rules that can change your actual tax benefit significantly.
For most Delaware homeowners filing a standard federal return, the mortgage interest deduction is the largest single line item. Under current law, interest is deductible on loan balances up to $750,000 for mortgages originated after December 15, 2017, or up to $1,000,000 for loans originated before that date. The deduction applies only if you itemize rather than take the standard deduction — which for 2024 is $14,600 for single filers and $29,200 for married couples filing jointly.
At Pike Creek Mortgages in Newark, DE, our NMLS Licensed Lending team regularly fields questions about which line items on a year-end mortgage statement translate into real tax savings. The answer depends heavily on your loan type, origination date, and whether your total itemized deductions clear the standard deduction threshold.
You save more by itemizing only when your total qualifying deductions — mortgage interest, property taxes, charitable contributions, and eligible out-of-pocket medical expenses — exceed your applicable standard deduction amount for the tax year.
For many Newark-area homeowners, property values and local tax rates play a decisive role here. Delaware’s effective property tax rate is among the lowest in the region, which ironically means some homeowners whose mortgage interest alone does not clear the standard deduction threshold may find itemizing does not benefit them — even if they assume it will. Run both calculations, or work with a CPA, before assuming the deduction applies to your situation.
One practical check: pull your Form 1098 (Mortgage Interest Statement) from your lender. That document shows the exact mortgage interest and, in many cases, property tax amounts paid through escrow during the calendar year — the raw numbers you need to compare against the standard deduction. If you have questions about what your 1098 from Pike Creek Mortgages will show, our Newark, DE office can clarify what each line represents.
Yes — discount points paid to lower your mortgage interest rate are generally deductible as prepaid mortgage interest, but the timing of that deduction depends on whether the points were paid on a primary home purchase or a refinance.
Points paid on a purchase loan for your primary residence are typically fully deductible in the year they were paid, provided they meet IRS requirements (including that the amount is a normal business practice in your area and is shown on the settlement statement). Points paid on a refinance must generally be deducted ratably over the life of the loan — meaning if you refinanced into a 30-year mortgage and paid $3,000 in points, you can deduct $100 per year, not the lump sum upfront.
If you closed on a refinance or purchase loan earlier this year through Pike Creek Mortgages, now is the time to locate your Closing Disclosure and confirm the points amount before year-end. See our related guide on understanding your Closing Disclosure for a line-by-line breakdown of what those figures mean.
The State and Local Tax (SALT) deduction cap limits the combined deduction for state income taxes and local property taxes to $10,000 per year ($5,000 if married filing separately) — a restriction that has been in place since the 2017 Tax Cuts and Jobs Act and currently remains in effect through 2025.
For Delaware homeowners, this cap is less punishing than it is in high-tax states like New Jersey or New York, but it still limits the benefit for households paying significant state income tax alongside their property tax bill. Delaware’s top personal income tax rate is 6.6%, and combined with property taxes, some Newark-area households bump against the $10,000 ceiling even with relatively modest property assessments.
The practical implication: you cannot simply add your full property tax bill to your state income tax and expect to deduct the whole amount. The cap applies to their combined total, so households already near $10,000 in state income taxes gain little or no additional deduction from their property tax payments.
If you refinanced in 2024, three tax-relevant events may have occurred: you may have paid new discount points (deducted ratably, not upfront), you may have triggered deductibility of any remaining unamortized points from a prior refinance, and your deductible interest amount likely changed based on the new loan balance and rate.
When you refinance, the IRS allows you to deduct any remaining unamortized points from the loan you paid off — all in the year the old loan is retired. This is a commonly overlooked benefit. For example, if you refinanced a loan in 2020, paid $2,400 in points on a 30-year term, and refinanced again in 2024, you can deduct the remaining roughly $2,080 in unamortized points in 2024 rather than spreading them over the remaining loan term.
Homeowners who refinanced through Pike Creek Mortgages this year should cross-reference their 2020 (or earlier) loan’s original settlement statement with their new 1098 to capture this benefit before the December 31 deadline.
The deductibility of private mortgage insurance (PMI) premiums has expired and been reinstated multiple times by Congress and is not permanently in the tax code — as of the current tax year, confirm with a tax professional whether this deduction has been extended for 2024 before claiming it.
When the PMI deduction has been active, it applied only to homeowners whose adjusted gross income (AGI) fell below phase-out thresholds (historically beginning to phase out at $100,000 AGI and eliminated entirely above $109,000). FHA mortgage insurance premiums (MIP) followed the same rules. Because this deduction is subject to annual congressional renewal rather than permanent law, it cannot be assumed to apply without confirming the current legislative status with a licensed CPA or tax advisor.
If eliminating PMI entirely is your goal, as covered in our guide to removing private mortgage insurance, reaching 20% equity in your home triggers cancellation rights under federal law — which may be a more reliable long-term strategy than depending on the deduction.
Before December 31, homeowners should collect their most recent mortgage statement, locate their Closing Disclosure if they bought or refinanced this year, verify their escrow account’s property tax disbursements, and consult a CPA to confirm whether itemizing actually beats the standard deduction for their household.
Specific action steps worth completing before year-end:
Pike Creek Mortgages, based in Newark, DE, is an NMLS Licensed Lender serving homeowners across New Castle County and the greater Delaware region. While we do not provide tax advice, our team can explain exactly what your loan documents and year-end statements show so you arrive at your tax appointment fully prepared.
Year-end mortgage statements often contain line items homeowners overlook at tax time — including partial-year interest from a mid-year closing, lender-paid credits that may affect your deductible points, and property tax timing differences between when funds left your escrow account and when they were actually paid to the county.
In Delaware, New Castle County property taxes are billed on a fiscal year that does not align with the calendar year, which can create confusion about which tax payments appear on your 1098 versus what you actually owe. If your escrow servicer paid a tax bill in January 2024 that covered a prior period, that payment is still deductible in 2024 — the year it was paid. Conversely, if your county tax is not due until February 2025, it will not appear on your 2024 1098 even if the bill has already arrived.
Cross-referencing your escrow account statement with your county tax records takes about fifteen minutes and can prevent both missed deductions and erroneous claims. Our team at Pike Creek Mortgages in Newark, DE can walk you through reading your escrow analysis if the figures are unclear.
This guide was prepared by the NMLS Licensed Lending team at Pike Creek Mortgages, serving Newark, Delaware and homeowners throughout New Castle County.
Yes, if you itemize deductions and your loan balance is at or below $750,000 (or $1,000,000 for mortgages originated before December 16, 2017), you can deduct the mortgage interest you paid during the year. You will only benefit from this deduction if your total itemized deductions exceed the standard deduction — $14,600 for single filers and $29,200 for married couples filing jointly in 2024.
Form 1098 is a Mortgage Interest Statement that your lender sends by January 31 each year. It shows the total mortgage interest and, often, the property taxes paid through escrow during the prior calendar year — the core figures you need to complete Schedule A if you are itemizing deductions.
Yes, property taxes are deductible under the SALT (State and Local Tax) deduction, but the combined deduction for state income taxes and property taxes is capped at $10,000 per year ($5,000 if married filing separately). Delaware homeowners with significant state income tax liability may find their property tax benefit is partially or fully consumed by that cap.
Points paid on a purchase loan for a primary residence are generally fully deductible in the year paid. Points paid on a refinance must be deducted ratably over the life of the loan. If you later refinance again, any remaining unamortized points from the prior loan become fully deductible in the year you pay off that loan.
Prepaying your January mortgage installment in late December moves that month’s interest into the current tax year, which can increase your itemized deduction — but only if you are already itemizing and the extra interest meaningfully increases your total above the standard deduction threshold. Confirm with your lender that the payment will be applied and credited before year-end, and consult a tax advisor to determine whether the strategy benefits your specific situation.