Asked by Tony  |  Submitted November 21, 2013

I’m thinking about buying a house, but is there a chance the government will end the mortgage deduction to balance the budget?

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  Answers  |  1

November 22, 2013

Hi Tony,

While I do not expect the government to eliminate the mortgage deduction, it should really be a moot point. If you can only afford the house in question with the benefit of a tax deduction, you're probably buying a house that is too expensive for your budget.

Owning a home can be very satisfying, but it's not a good "investment" per se, in that it generates no income and actually costs you money to maintain.

It makes economic sense if you intend to live in it for decades, as your fixed payment actually declines in real terms due to inflation.

In any event, if you like the house and it fits within your budget with or without the tax break, go for it. If it's a close call, then I recommend erring on the side of caution and not buying.

Best of luck!
Charles Sizemore

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