Your lender collects one PITI payment, but the IRS wants each component separately. This tool splits it instantly so you know exactly what goes on each Schedule E line.
Your Loan Details
$933
Monthly Interest — Deductible on Schedule E Line 12
Deductible — Line 12
$933
Monthly interest
Not deductible
$367
Monthly principal (builds equity)
Deductible — Line 16
$200
Monthly tax escrow
Deductible — Line 9
$100
Monthly insurance escrow
Note: This is an estimate tool, not tax advice. Your actual interest deduction comes from Form 1098 issued by your lender. Always use your 1098 for the actual Schedule E filing. Consult your CPA for property-specific guidance.
How to use this calculator
1
Enter loan balance
Use your current outstanding principal balance — not the original loan amount. Find it on your lender's portal or monthly statement.
2
Enter interest rate
Use your current note rate. For ARMs, use the rate in effect this month. Do not use APR.
3
Enter full PITI payment
The total amount debited from your account each month, including taxes and insurance if escrowed.
4
Read each Schedule E line
Interest goes on line 12. Taxes on line 16. Insurance on line 9. Principal goes nowhere — it is not deductible.
The interest calculation uses simple interest on the current balance. Your actual amortization schedule from the lender will match this closely, though slight rounding differences may appear. For the official tax deduction, always use the amount on your Form 1098.
Interest vs. principal split over loan life
Loan Year
Interest Share
Principal Share
At 7%, $160k Balance
Year 1
~82%
~18%
$905/mo interest
Year 5
~77%
~23%
$845/mo interest
Year 10
~68%
~32%
$745/mo interest
Year 20
~47%
~53%
$510/mo interest
Year 27
~10%
~90%
$110/mo interest
Common mistakes on Schedule E mortgage entries
Deducting the full PITI payment
The entire mortgage payment is not deductible. Only interest, taxes, and insurance are. Principal is a capital transaction. Deducting the full PITI payment significantly overstates your expenses.
Ignoring Form 1098
Your lender already calculated exactly how much interest you paid. Use that number on line 12. Do not estimate — your lender reports the same 1098 data to the IRS.
Double-counting taxes on Schedule A and Schedule E
Taxes on a rental property go on Schedule E only, not Schedule A. You cannot deduct the same property taxes twice.
Missing the refinancing loan fees
Points and loan origination fees on a rental property refinance are deductible over the life of the new loan, not all in year one. Add the annual amortized amount to your Schedule E interest line.
Your PM statement does the categorization — DoorVault does the math
DoorVault reads your property manager statements each month, identifies mortgage payments, and maps them to the right expense categories automatically. No more manual splits at tax time.
What part of my mortgage payment is tax deductible?
Only the interest portion is deductible on Schedule E line 12. Property taxes paid through escrow go on line 16. Insurance goes on line 9. Principal repayment is not deductible anywhere — it builds your equity, not a tax deduction.
How do I split my mortgage payment for Schedule E?
Use your Form 1098 from your lender for the annual interest amount on line 12. Use your county tax records or escrow statements for property taxes on line 16. Use your insurance premium statement for line 9. This calculator estimates the monthly split before you have your year-end documents.
Is mortgage principal deductible on Schedule E?
No. Principal repayment reduces your loan balance and increases your equity. It is not an expense — it is a balance sheet transaction. Only interest is deductible as a rental expense.
How does escrow work for rental property taxes?
Your lender collects 1/12 of your annual property taxes each month as part of your PITI payment and holds it in escrow. The tax deduction is taken when your lender pays the county, not when you contribute to escrow. Your annual mortgage statement will show when and how much was paid.