I think it depends on what your state taxes are like (and your income). I live in Minnesota, and my state income taxes and property taxes combined (both are deductible) are more than the standard deduction, so my morgage interest deduction is a real benefit over the standard deduction.
This would probably not be the case if I lived in Mississippi.
Originally Posted by Nords
Once the standard deduction is figured in, I don't think there's much of a tax advantage to having a mortgage.
Reducing the mortgage interest rate by one's marginal tax bracket is not what's actually being "saved", and the concept behind the math is as screwed up as that "80% of pre-retirement income" thumbrule that journalists are always blathering about.
But that interest deduction has sure guided a lot of home-buying behavior, as well as all those heart-warming FHA commercials... so as a government subsidy I suspect that it actually delivers a whole lot of bang for the forsaken tax revenue.