I have no doubt that some folks get out a calculator and plan out their budget based on the deduction, but I think many do not. Anecdotally, myself and the people in my group of friends who also own houses, we budgeted for the mortgage payment irrespective of tax benefits and just smiled on tax day. I really try to avoid as much as possible relying on outside variables like tax deductions when planning my budget. I go in conservatively and then appreciate the benefits while they last.