Mortgage Interest Deduction Preserved: What Carolinas Homeowners & Buyers Need to Know

Recent tax reform news has flown under the radar—but for anyone buying or owning a home in higher-value communities across the Carolinas, it’s a game-changer. The House tax package maintains the ability to deduct mortgage interest, a benefit that can translate into significant annual savings. If you’ve been watching home prices inch higher, especially in resort-style neighborhoods, here’s why this matters and how to calculate your potential advantage.

Why It Matters for Higher-Value Communities

In markets like Charlotte, Fort Mill, and Lake Wylie, the median single-family home price hovers around $691,000—a price point common in neighborhoods with golf courses, lake access, and other upscale amenities. Here’s a quick breakdown:

1. Purchase Price & Down Payment
   • Home Price: $691,000
   • 20% Down Payment: $138,200
   • Mortgage Amount: $552,800

2. Current Average Interest Rate
   • Rate (example): 6.95%

3. First-Year Interest Estimate
   • $552,800 × 6.95% ≈ $38,400 in interest

With the mortgage interest deduction still intact, you may be able to deduct a large portion—potentially all—of that $38,400 interest from your taxable income. For higher-income households, that could mean a tax savings of $7,000–$10,000 (or more), depending on your bracket.

Who Benefits Most?

• Homeowners in Higher-Value Markets
  If you already own a home—or plan to—where the purchase price is in the $600K+ range, you’ll feel this deduction most. The higher your mortgage interest, the greater your potential tax savings.

• New Buyers Preparing to Enter the Market
  If you’re budgeting for a home purchase and factoring in monthly mortgage payments, don’t forget to include the tax savings from interest. It could free up thousands for additional upgrades or investments.

• Luxury & Resort-Style Neighborhood Buyers
  Communities with amenities—lakefront, golf, pickleball, clubhouse, and more—often command premium prices. Those higher mortgage balances translate to larger deductible interest.

How to Estimate Your Tax Savings

1. Calculate First-Year Mortgage Interest
   Use an amortization schedule or ask your lender for an approximate figure. In our example, a $552,800 loan at 6.95% yields around $38,400 in first-year interest.

2. Determine Your Marginal Tax Rate
   If you’re in the 24% federal bracket, deducting $38,400 could lower taxable income by that amount, saving roughly $9,200 in federal tax (38,400 × 24%). State deductions may follow suit, depending on North or South Carolina rules.

3. Confirm Itemized Deduction Eligibility
   To use the mortgage interest deduction, you must itemize on Schedule A instead of taking the standard deduction.

   • 2023 Standard Deduction (for reference): $13,850 (single), $27,700 (married filing jointly)

   • If your total itemized deductions (interest + property taxes + other qualifying expenses) exceed that threshold, itemizing is worthwhile.

4. Consult a Tax Professional
   This blog provides general information only. Tax laws can change, and individual circumstances vary. A qualified CPA or tax advisor can run precise numbers to maximize your benefits.

What This Means for Carolinas Real Estate

• More Affordable Homeownership: Even as rates tick upward, the mortgage interest deduction softens monthly payment blow.

• Stronger Long-Term Home Values: Communities like Charlotte’s SouthPark, Fort Mill’s Tega Cay, or Lake Wylie’s resort-style enclaves maintain demand because tax benefits remain.

• Financial Flexibility: Extra savings could fund home improvements—think a spa-style bathroom, a chef’s kitchen, or an upgraded deck for entertaining.

Next Steps: How to Leverage This Deduction

1. Run the Numbers
   Estimate your first-year mortgage interest and determine if itemizing makes sense.

2. Budget Wisely
   Consider how much extra cash flow you could free up by deducting interest—then decide if you want to invest in upgrades or pay down principal faster.

3. Consult a Trusted Tax Advisor
   If you need a referral, I work closely with several CPAs and can introduce you to someone I trust.

4. Plan Your Home Purchase or Sale Strategically
   If selling, highlight tax benefits to attract buyers. If buying, factor deductions into your monthly budget.

Why Clarity Matters

With mortgage interest deductions preserved, you have more certainty when planning a move, renovation, or investment in your property. Guessing or hoping for the best could cost you. My Signature Grace2Grow™ Method™ ensures you proceed with intention—aligning your budget, your tax strategy, and your lifestyle goals.

Ready to Take the Next Step?

If you’re curious about how the mortgage interest deduction applies to your situation—whether you’re a homeowner, seller, or buyer—I’m here to help.

I’m Lorelei Beightol—your trusted guide for home transitions in Charlotte, NC. Whether you’re buying, selling, building, or relocating, you deserve clarity, confidence, and a partner committed to your long-term success.

Follow @lorelei_behomecarolina_realtor for more insights on real estate, tax strategies, and luxury resort-style living across the Carolinas.

Disclaimer: This blog is for informational purposes only. I am not a tax advisor. Always consult a qualified tax professional before making financial decisions.