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Comment by ska | Hacker News Reader

Yes. This plus the home mortgage interest tax deduction amount to absolutely massive market distortions from policy encouraging home ownership in the US.

You can argue +'s and -'s, but you can't argue it's free market rates.

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Well.. Australia and Canada have more significant housing bubbles than the US without this. So how does that work?

I wonder how many taxpayers are claiming the mortgage interest deduction nowadays after the rise in standard deduction.

it’s pretty useless to me since they lowered it to 750k and raised the standard deduction.

A $750k loan is easily $20k interest, and you're probably maxing out the $10k SALT cap too. That's almost triple the standard deduction.

It’s not triple anything if you’ve got a wife and 3 kids.

That's an interesting point, plausible less impact over time.

10% or fewer American tax filers itemize in the first place, so less than that use the mortgage interest tax deduction.

I barely eeked into my itemizing last year, and that was the first whole year of owning a house. I guess with principal reduction this year, I probably won’t qualify the next, and my mortgage is pretty large as well (as large as most living in a high COL area get).

Without being able to itemize, it might make more sense to pay the principal down, but my interest rate is low enough that I have to think if there is something better to do with extra money (we are already over exposed to the stock market). Also, Trump’s tax cuts for individuals will expire soon, so the bigger standardize deduction might go away with it.

In high cost of living areas it isn’t too uncommon to have a 750k mortgage. In much of the country that’s insane but a 2400 sq foot house can easily go for $1,000,000 - $2,000,000 in high cost places.

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