Mortgage insurance will be tax-deductible this year. The new law means that it will be cheaper to get mortgage insurance for some homeowner instead of getting piggyback loans.

The 109th Congress passed the tax law in its final hours. Hundreds of thousands of homeowners will save a total of $91 million when they file their tax returns in 2008.

Don't get a piggyback loan without taking a serious look at mortgage insurance, because mortgage insurance is likely to be cheaper in the long run, and it might even cost less in the short run.

According to the analysts, a homeowner with a $180,000 mortgage would save about $351 in taxes a year because of the law. That assumes that the borrower has good credit and is in the 25 percent tax bracket.

 The tax deduction applies only to mortgages that are closed in 2007. If you have a loan with mortgage insurance in 2006, you won't be able to deduct the premiums in the 2007 tax year unless you refinance in 2007.

There are income limits. You get the full deduction if your adjusted gross income is $100,000 or less.

This is a one-year deal, and Congress would have to renew the deduction to make it apply for the 2008 tax year and beyond.

If you take the standard deduction instead of itemizing deductions, the new law makes no difference to you.