Despite the increase in housing rates and mortgage fees, buying your own home can be a very financially savvy move this year. According to RealtyTrac’s 2016 Rental Affordability Analysis, buying remains more affordable than renting in 58 percent of the U.S. housing markets. In addition to rising rents, which are now overtaking weekly wage growth in more than half of the nation’s housing markets, various tax breaks make homeownership the more appealing option.  

Here is a list of the possible tax breaks involved in owning your own home:

• The largest tax incentive for homeowners is reflected in mortgage interest. Most homeowners will make a house payment each month, and the bulk of that check will go toward interest, and that interest is tax deductible. This does not apply to loans over $1 million.
• Closing cost deductions: The first year you buy your home you are able to claim “points,” or origination fees on your loan. These fees are typically 1 percent or more, so the tax return can be considerable.
• Real estate property taxes paid on your primary residence and vacation home are fully deductible for income tax purposes.
• Tax deductions on home equity lines: You can deduct the interest you pay on a home equity loan or line of credit so that you can shift your credit card debts to your home equity loan. This allows you to pay a lower interest rate than the credit card interest rates and also get a deduction on the interest.
• Building Equity: Paying the mortgage every month and reducing the amount of your principal forces you to save money. Each month you are building up more valuable equity in your home and saving yourself money in the process.