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IRS Form 1098 Filing Requirements For Mortgage Lenders

Form 1098 reports the mortgage interest you received so borrowers can claim eligible deductions and the IRS can match what’s reported. This guide covers Form 1098 rules for mortgage interest recipients and when the $600 threshold applies. It also explains the key boxes, deadlines, and common mistakes so you can file Form 1098 correctly.

Why Filing Form 1098 Accurately Matters

Correct Forms 1098 help borrowers claim any home mortgage interest deduction they’re allowed to take (if they itemize).

When your annual records (payments, interest, and balances) are accurate, it’s easier for you to complete Form 1098 correctly. Mistakes frequently include incorrect dollar amounts, misspelled names, or incorrect dates. These issues can also lead to IRS information return penalties that are charged for each Form 1098 you file incorrectly or late and for each borrower statement you provide incorrectly or late.

Correctly filing Form 1098 and providing the borrower statement on time helps you avoid IRS information return penalties and reduces the need for corrected forms later.

Who Must File Form 1098 And When The $600 Rule Applies

The mortgage lender must file Form 1098 if, in the course of trade or business, they receive $600 or more of mortgage interest (including certain points) from an individual borrower on any one mortgage during the calendar year.

How the Form 1098 $600 threshold works

  • The $600 test applies separately to each mortgage. You’re not required to file for a mortgage with less than $600 of interest, even if the same borrower paid you over $600 total across multiple mortgages.
  • File a separate Form 1098 for each mortgage that meets the reporting requirement.Filing is optional below $600 (you may file, but you’re not required to).

Who typically files

On meeting the Form 1098 filing requirements, these are the entities that typically need to file:

  • Banks and credit unions
  • Mortgage lenders
  • Loan servicers/collection agents that are the first to receive the interest payments (not points) even if they pass the interest on to another lender (with a limited exception when the servicer doesn’t have the info needed to report)
  • Private lenders, when the interest is received in the course of a trade or business
  • Governmental units (or their agencies) that receive mortgage interest from individuals

When a loan is transferred or servicing changes

If the mortgage is sold or servicing is transferred mid-year, reporting generally follows who received/collected the interest. As a result, a borrower may receive more than one Form 1098, with each filer reporting the portion of interest collected during its period.

Form 1098 Box-by-Box Compliance Guide

Box What to enter Why it matters
1 Mortgage interest received from borrower(s) during the year (don’t include points) This is the borrower’s primary figure for mortgage interest deductions (if eligible), and the IRS uses it to match interest reporting.
2 Outstanding mortgage principal as of Jan 1
If originated this year: principal at origination
If acquired this year: principal at acquisition		 Helps the borrower/IRS evaluate interest limits tied to mortgage debt and supports consistency checks.
3 Mortgage origination date (the date the loan originated with the original lender) Helps determine which mortgage-interest limitation rules apply.
4 Refund/credit of overpaid interest from prior year(s) Prevents borrowers from overstating deductions when prior-year interest is later refunded or credited.
5 Mortgage insurance premiums: only fill this in if mortgage insurance premium reporting applies for that year. If it does, enter qualified mortgage insurance premiums of $600+ paid/received for that mortgage (including any prepaid premiums) This box is only used when the law allows MIP reporting for the year so it’s a “report if applicable” field.
6 Points paid on the purchase of the borrower’s principal residence Points may be deductible (in full or over time, depending on facts). Reporting supports accurate deduction treatment.
7 Check the box if the property securing the mortgage is the same as the borrower’s mailing address Tells the IRS whether the secured property address matches the borrower’s address, or whether you’ll provide it in Box 8.
8 Address or description of the property securing the mortgage (use when Box 7 isn’t checked or when the secured property address differs) Helps identify the secured property tied to the reported interest/loan.
9 Number of mortgaged properties (only if more than one property secures the mortgage) Flags multi-property collateral situations and supports accurate property identification.
10 Other information you want to report (example: real estate taxes, insurance paid from escrow, or collection-agent details) An optional field to share additional borrower-facing details tied to the loan/escrow.
11 Mortgage acquisition date (only if you acquired the mortgage during the year) Clarifies ownership/servicing changes that can affect what you report for the year.

Tip: For loans you buy, enter the outstanding principal balance as of the date you acquired the mortgage in Box 2, use the loan’s original origination date in Box 3, and enter your acquisition date in Box 11.

Form 1098 Deadlines For Tax Year 2025

Action Deadline
Furnish Copy B to the borrower February 2, 2026 (standard due date is Jan 31; it moves to the next business day when it falls on a weekend/holiday)
File with the IRS (paper, with Form 1096) March 2, 2026 (standard due date is Feb 28; it moves to the next business day when it falls on a weekend/holiday)
File with the IRS (electronic) March 31, 2026
Correct errors Fix and file corrections as soon as you discover an error. (Penalty amounts depend on how quickly you file a corrected return after the original due date.)


Pro Tip: If you need more time to file with the IRS, submit Form 8809 by the return due date to request an extension (generally 30 days; available through FIRE for many forms). This does not extend the borrower statement deadline borrower-copy extensions are requested separately using Form 15397 (fax).
Reminder: If you file 10 or more information returns total (aggregate across return types), you’re generally required to e-file.

Easy Pre-Filing Checklist for Mortgage Lenders

Verify the borrower: Confirm the borrower’s legal name, mailing address, and TIN (SSN/ITIN) match your loan system.

Match the money: Reconcile total mortgage interest received to your servicing ledger/payment records (separate interest from principal/escrow).

Verify loan details: Double-check the origination date (Box 3), principal balance (Box 2), and property address (Boxes 7/8) before you generate forms.

Review special items:

  • Refunds/credits of prior-year interest (Box 4)
  • Points (Box 6): reported only when they meet the “purchase of principal residence” reporting rules (not refinancing points)
  • Mortgage insurance premiums (Box 5): only if reporting is required for that tax year

Handle transfers/acquisitions: If you acquired a mortgage during the year, report principal as of the acquisition date (Box 2) and enter the acquisition date (Box 11) and report only the interest you received/collected for your period.

Verify e-delivery consent (if applicable): Get consent before electronic delivery and follow the IRS e-delivery rules.

Tip: Retain copies of filed/furnished forms (or reconstructible data) and support docs for at least 3 years from the due date (longer in some cases, such as backup withholding).

Common Mistakes To Avoid

1. Escrow reported as interest
Avoid by pulling Box 1 from the interest-only ledger (not escrow). If already filed, you can fix it by issuing a corrected Form 1098 with the right interest amount.

2. Wrong loan balance in Box 2
Use the required snapshot (Jan 1 balance, or balance at origination/acquisition if that happened during the year).

3. Name/SSN mismatch
This can be avoided by following the prefilling checklist validate the borrower’s legal name + SSN/ITIN against your onboarding/servicing records before filing.

4. Late filing
As penalties escalate quickly, build an internal deadline buffer and sort out data early so you can file timely penalties generally increase the longer you wait.

Special Situations To Consider

  • Year-end payoff: You must file Form 1098 only if (in your business) you received $600 or more of reportable mortgage interest (including certain points) on that mortgage during the year even if the loan was paid off in December.
  • Multiple borrowers (including spouses): You generally file one Form 1098 for the payer of record (the main borrower in your records) and report the total interest received on that mortgage. If your records don’t show who the main borrower is, you must designate one.
  • Backup withholding: Backup withholding is not part of Form 1098 mortgage-interest reporting. You file Form 1098 because you received $600+ of reportable mortgage interest on a mortgage.

Real-World Examples

Scenario What the lender must do Notes
Borrower paid $600+ in mortgage interest on one mortgage File Form 1098 with the IRS and furnish the borrower statement Form 1098 is used to report $600+ of mortgage interest (including certain points) received per mortgage during the year.
Borrower paid under $600 in interest on one mortgage No Form 1098 required (optional to file) The $600 test applies separately to each mortgage; filing below $600 is optional.
One borrower has multiple mortgages with you Apply the $600 test to each mortgage and file separate 1098s as needed IRS requires a separate Form 1098 for each mortgage; don’t aggregate across loans to meet $600.
Loan/servicing changed hands mid-year Report only the interest you received/collected while you were the interest recipient/servicer Form 1098 reports the interest you received during the year. If you’re the first to receive reportable interest as a servicer/collection agent, you generally file.
You acquired a mortgage on Aug 15 and collected interest Aug–Dec File for the interest you received; Box 2 = principal as of acquisition date, Box 3 = original origination date, Box 11 = acquisition date Box rules change when a mortgage is acquired, and the origination date stays with the original lender.
Points paid on a qualifying home purchase Report points in Box 6 (and remember: points + other interest can count toward the $600 filing test) Points are reported in Box 6, and certain points are reportable when combined with other interest to meet $600.
Escrow items were mistakenly included as Box 1 interest File and furnish a corrected Form 1098; move escrow-type items to Box 10 if you choose to report them Box 1 is interest only (with specific exclusions); Box 10 is for “other” items like insurance paid from escrow. Corrections should be filed as soon as possible.

FAQs

1. If the threshold is $600, is it per borrower or per loan?

Per loan, i.e., per mortgage. If, in your business, you receive $600 or more of mortgage interest during the year on that one mortgage, you must file Form 1098 for that mortgage (and give the borrower a copy).

2. Can the lender e-mail Copy B?

Yes you can provide the borrower statement electronically only if the borrower consents and you follow the IRS e-delivery rules. If the borrower doesn’t consent, give them a paper copy.

3. What if the filing is after March 31st?

If you file after the due date, late Form 1098 penalties can apply. For Tax Year 2025 Forms 1098 (filed in 2026), the IRS due date is March 2, 2026 (paper) or March 31, 2026 (e-file). For information returns due in 2026, the penalty is $60 (up to 30 days late), $130 (more than 30 days late but by August 1), $340 (after August 1 or not filed), and $680 for intentional disregard.

4. Are the premiums for mortgage insurance deductible?

For Tax Year 2025, you should generally leave Box 5 blank. The IRS says the itemized deduction for mortgage insurance premiums has expired, and Form 1098 only uses Box 5 when that provision applies. Don’t enter “0” unless the IRS instructions specifically tell you to.

5. How do lenders correct a form?

File a corrected Form 1098 with the IRS and give the borrower a corrected statement. If you filed the original on paper (and you’re not required to e-file), file Corrected Copy A with Form 1096. If you filed the original electronically or you’re required to e-file, you must e-file the correction (through the same system used for the original).

6. Must electronic filing be used?

Yes if you file 10 or more information returns total (combined across types), you generally must e-file, unless you get an IRS hardship waiver (Form 8508).

7. Does a change of mailing address for the borrower mean a new form is required?

No an address change by itself doesn’t mean you file a new Form 1098. But you must report the property address in Box 8 when the mortgaged property address is not the same as the borrower’s mailing address (or if you don’t use Box 7).

The Bottom Line

Accurate Form 1098 reporting helps borrowers claim the right deductions and helps you avoid IRS notices. With the right data checks upfront, you can spot mismatches early and file on time with confidence.

E-file Form 1098 fast with built-in TIN checks and error review in Tax1099.

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