You just bought a house and paid one “point” on your home loan. A point, which is the interest lenders charge up front, is 1% of the mortgage loan amount. If you itemize your income-tax deductions, points are deductible. First Time Around Points paid for a mortgage on a primary residence are generally deductible in the year they are paid — if certain conditions are met. For example, your mortgage must be secured by the home being purchased, the points must not exceed the number generally charged in your area, and the points must be paid from separate funds, not rolled into the mortgage. Second Time Around If you refinance and use some of the new mortgage to make home improvements, as long as payment is separate, points paid on the portion of the loan that finances the improvements can also be deducted in the year they are paid.