How to Report Mortgage Interest on Two Form 1098s After a Mid-Year Refinance

If you refinanced your mortgage partway through the year, you're probably staring at two Form 1098s wondering which one is right — or whether you're supposed to use both. As long as each servicer received at least $600 in interest while it held your loan, the answer is generally both, and here's how the IRS instructions explain why that happens and how to add them up correctly.

Why refinancing splits your mortgage interest across two forms

The IRS treats a refinance as two separate events: paying off your old mortgage in full, and originating a brand-new one. Because these are legally distinct loans, the rules require a separate Form 1098 for each one, and each servicer reports in Box 1 only the interest it actually received while it held your loan. That's why a homeowner who refinances in June typically ends up with one 1098 from the original servicer covering interest paid from January through the payoff date, and a second 1098 from the new lender or servicer covering interest from the new loan's origination date through December 31. Neither form is wrong or incomplete on its own — each one is simply reporting its own slice of the year, and you're expected to combine them when you file. One condition worth knowing: this reporting requirement only kicks in if a servicer received at least $600 in interest during the months it held your loan, so if you refinanced very late in the year or your loan balance was small, one of the two 1098s might never arrive because the threshold wasn't met.

When to expect each form

Both your old servicer and your new lender are on the same clock: each Form 1098 for a given year must generally be furnished to you by January 31 of the following year, with a copy also going to the IRS. This deadline applies separately to each servicer that issues a 1098, so you shouldn't expect one combined form or a single mailing — you're watching for two pieces of mail (or two portal notifications) from two different companies, potentially arriving on different days but both due by the same January 31 cutoff. If it's early February and you've only received one of the two forms, that's worth a call to whichever servicer is missing before you assume it isn't coming at all, since the $600 threshold might explain the gap rather than a mailing error.

A worked example: refinancing in June

Picture a homeowner who refinances in June and gets a 1098 from the original servicer showing $3,600 of interest for the January-through-June period, plus a second 1098 from the new lender showing $4,200 of interest for June through December. Neither form by itself reflects a full year of interest paid, which is expected given how the reporting is split between the two loans. To get the full picture, the two Box 1 amounts are added together — $3,600 plus $4,200 equals $7,800 — and that combined figure is what gets entered as mortgage interest on Schedule A (Form 1040), line 8a, assuming the interest is qualified, deductible residence interest and the taxpayer itemizes deductions. These numbers are hypothetical and used purely to illustrate the mechanics, not tied to any specific tax year's dollar limits.

• old servicer box1: 3600
• new lender box1: 4200
• Formula: old servicer box1 + new lender box1
• Result: 7800

Illustrative example only; actual amounts depend on your loan balance, rate and refinance date.

What to do when you have two 1098s

1. Confirm you've received a 1098 from both the original servicer and the new lender, keeping in mind each is only required to send one if it received at least $600 in interest while holding your loan.
2. Check that both forms were sent to you by January 31 of the year after you refinanced, since that furnishing deadline generally applies separately to each servicer, though mail transit can push actual arrival a bit later.
3. Locate Box 1 on each form — this is the interest actually received by that servicer, not an estimate of what you paid for the full year.
4. Add the two Box 1 figures together to arrive at your total mortgage interest paid for the year across both loans.
5. Enter that combined total on Schedule A (Form 1040), line 8a, if you itemize deductions and the interest qualifies as deductible residence interest.
6. Keep both original 1098s with your tax records, since a copy of each is separately sent to the IRS as well.

What each 1098 form covers, side by side

Feature	Original servicer's 1098	New lender/servicer's 1098
Period covered	Typically January 1 through your payoff date	Typically loan origination date through December 31
What Box 1 shows	Interest that servicer actually received before payoff	Interest the new lender actually received after closing
When it should be sent to you	Generally by January 31 of the following year	Generally by January 31 of the following year
Whether it's guaranteed	Only if that servicer received at least $600 in interest during the months it held the loan	Only if the new lender received at least $600 in interest during the months it held the loan

Rows on what's covered and reported come from how the IRS instructions describe the two forms a mid-year refinance typically generates, and the row on timing reflects the separate furnishing-deadline rule that applies to each servicer.

Key takeaways

• A mid-year refinance is treated by the IRS as paying off one mortgage and starting a new one, which is why the reporting splits into two separate 1098s rather than one combined form.
• Each servicer reports in Box 1 only the interest it actually received while it held your loan, so no single 1098 will show your full year of interest paid.
• Both forms are generally due to you by January 31 of the following year, and this deadline applies separately to each servicer.
• In an illustrative example, you add the two Box 1 amounts together to get combined mortgage interest, which is entered on Schedule A (Form 1040), line 8a, assuming the full amounts are qualified, deductible residence interest and you itemize.
• If either servicer received less than $600 in interest during its portion of the year, it isn't required to send you a 1098 at all for that loan.

Frequently asked questions

Do I need to add the interest from both 1098 forms together myself, or does the IRS do that automatically?

You're responsible for adding them yourself when you prepare your return: in the illustrative example, the $3,600 shown on the original servicer's 1098 and the $4,200 shown on the new lender's 1098 are added together to get $7,800, which is then entered as combined mortgage interest on Schedule A (Form 1040), line 8a, assuming the interest is qualified, deductible residence interest and you itemize deductions.

What if I only received one 1098 after my mid-year refinance instead of two?

This can happen legitimately if one of the two servicers received less than $600 in interest during the months it held your loan, since that servicer isn't required to issue a 1098 in that case; it's worth checking your own statements to confirm the missing amount before assuming a form was lost in the mail.

Is one servicer's 1098 supposed to show my full year of mortgage interest?

No — because the IRS treats a refinance as ending one mortgage and starting a new one, each servicer's Box 1 only reflects interest it actually received during the months it held your specific loan, not a full calendar year of payments.

By what date should both of my 1098 forms have arrived?

Each one should generally be furnished to you by January 31 of the year following the tax year in question, and a copy of each form is also sent to the IRS separately, so this deadline applies independently to both your old servicer and your new lender.

Keep both 1098 forms even after you've added them together and filed, since a copy of each one is also sent to the IRS by the issuing servicers.

Sources

• www.irs.gov
• www.irs.gov