truly confused, help much appreciated!

I've been reading through the IRS site and the messages on this board, but sadly, I can't get my head around this...

Can a US citizen living in the UK and making exclude BOTH the $85,700 AND the housing exclusion (in London, around $77,000 p/a) from US taxes? --

OR it it whichever sum is smaller-- the $85,700 or your total income minus the housing exclusion?

If it's the second scenario, then if I make (the GBP equivalent of ) $185K, does this mean I pays US tax on $100K?

Final question: what about mortgage interest? If I had a mortgage on a UK property, could I deduct it from US taxes in addition to the standard $85,700?

Thanks so much to anyone who can help my addled brain!

You exclude the foreign earned income exclusion ($85 k) plus actual housing costs up to the limit for your location less the base housing cost.

You may also have mortgage deductions but these are typically moot because of the foreign tax credit...

Thank you- I appreciate the help!