[bp001]

Agree dkokelly, and it also gets worse.

In your example, $5000/year interest is under the standard deduction. Unless you already have other deductions to itemize, you are getting no tax write-off for the $5000.

For instance, in 2008, the standard deduction for singles is $5450. Lets assume that you have $2000 in other itemized deductions. So, the first $3450 of your mortgage interest simply offsets the write off you would get with the standard deduction. Therefore, only $1550 would get you an additional deduction.

Now, if you're married, the standard deduction is $10900. In my situation, my mortgage interest is just barely greater than that amount.