Federal Housing Administration

Mortgage interest loses value

Uncle Sam allows us to deduct every penny we pay in mortgage interest, up to $1 million a year. Of course, few people pay that much, but it is part of the tax code nevertheless.

According to 2014 estimates by the Congressional Joint Committee on Taxation, the mortgage interest deduction accounted for $72.4 billion in savings for taxpayers. About 34.5 million taxpayers claimed the popular write-off.

But most of that money must have gone to better-heeled taxpayers, because at today's still extremely low loan rates, the write-off is all but useless, at least to folks who purchase modest houses.

This all hinges on how much money you borrow and at what interest rate. The more...