On a third home the mortgage interest is not tax deductable on a personal income return, as third homes are considered investment property's and not personal use properties. The interest can be deducted against a business tax return, as an expense.

On a second home, however, the mortgage interest is tax deductable, but bear in mind you are only allowed to deduct the interest on a total of $1,000,000 of mortgage debt for a couple filing jointly and $500,000 for those filing as single. If you can afford two homes, chances are the combined cost is likely to exceed to the debt caps the IRs has put in place.

Unlike a first mortgage, points, are not deductable on a second mortgage.