Welcome > Resources > Mortgage Calculators > Determine Tax Savings ...

Mortgage Tax Savings Calculator

Interest paid on a mortgage is tax deductible if you itemize on your on tax return. So are points that are paid to lower your interest rate. Use this calculator to determine how much you could save in income taxes. Click on the "View Report" button to view the results in detail.

Definitions

Mortgage amount

Original or expected balance for your mortgage. Taxpayers can deduct the interest paid on first and second mortgages up to $1,000,000 in mortgage debt (the limit is $500,000 if married and filing separately). Any interest paid on first or second mortgages over this amount is not tax deductible. Home equity loans are limited to $100,000 or the amount of equity you have in your home. Our calculator limits your interest deduction to the interest payment that would be paid on a $1,000,000 mortgage.

Interest rate

Annual interest rate for this mortgage.

Interest rate after taxes

Annual effective interest rate after taxes are taken into account. Please note that in addition to the $1,000,000 mortgage debt limit, this calculator assumes that your itemized deductions will exceed the standard deduction for your income tax filing status. If your itemized deductions don't exceed your standard deduction, the benefit of deducting the interest on your home will be reduced or eliminated. For 2002 the standard deductions were $7,850 for married couples filing jointly, $3,925 for married couples filing separately, $4,700 for singles, and $6,900 for heads of household. You should also be aware that the total tax savings may be less for higher incomes that have their allowable itemized deductions phased out.

Term in years

The number of years over which you will repay this loan. The most common mortgage terms are 15 years and 30 years.

Monthly payment

Monthly principal and interest payment (PI).

Federal tax rate:

The marginal federal tax rate you expect to pay.

State tax rate:

The marginal state tax rate you expect to pay.

Annual Percentage Rate (APR)

A standard calculation used by lenders. It is designed to help borrowers compare different loan options. For example, a loan with a lower stated interest rate may be a bad value if its fees are too high. Likewise, a loan with a higher stated rate with very low fees could be an exceptional value. APR calculations incorporate these fees into a single rate. You can then compare loans with different fees, rates or different terms.

APR after taxes

Annual percentage rate after taxes are taken into account. Unlike your after-tax interest rate, the APR after taxes takes closing costs into account.

Loan origination percent

The percent of your loan charged as a loan origination fee. For example, a 1% fee on a $120,000 loan would cost $1,200.

Discount points

Total number of "points" purchased to reduce your mortgage's interest rate. Each "point" costs 1% of your loan amount. As long as the points paid are not a broker's commission, they are considered tax deductible in the year that they were paid.

Other fees

Any other fees that should be included in the APR calculation. These fees can vary by lender, but at a minimum usually includes prepaid interest.

The mortgage calculators are provided by KJE Computer Solutions, LLC and made available to NUMBER1EXPERT as self-help tools for your independent use and are not intended to provide investment advice. We can't guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.

"A model of how the Internet can facilitate the process of deciding where to send your children to school" - America's Best School Profiles by The Heritage Foundation Massachusetts Public, Private and Charter Schools: Compare them using these top-rated, comprehensive reports.   Schools in Brookline, Newton and Boston

First Time Buyers >A Great Opportunity Home ownership may seem like "the impossible dream" to first-time buyers who have to stretch in order to purchase their first home. Many younger buyers can afford the monthly mortgage payments, but may have to get creative to cover the down payment and closing costs. Contact a real estate professional if you are thinking about buying your first home. For those whose funds are limited, there may be possibilities you have not considered, such as local or federal loan programs that can help get you moved into your new home. There are many flexible new mortgage loans available to first-time buyers. Sellers are sometimes willing to extend a small loan to help cover closing costs in order to complete the sale. You can also consider the many housing options available. There are beautiful condominiums and townhouses with desirable amenities and prices that are designed to appeal to first-time buyers who cannot yet afford a single-family detached home. See All Tips In The "First Time Buyers" Category > See Complete Library Of Hundreds Of Tips In 30+ Categories >

Q  What is the most common street name in the US? A  Second Street ranks as the most common street name. First Street is not #1 because many "First" streets are called "Main" Street. See More Real Estate Trivia >

Eric Glassoff Coldwell Banker 1375 Beacon St. Brookline, MA 02446 Tel: 617-233-6210 Fax: 617-796-8480 Email: Eric@BostonRealEstateExperts.com Email: eric.glassoff@nemoves.com Email: eglassoff@comcast.net The BostonRealEstateExperts.com Web site contains content and information orginated by various Third Party Content Providers including Multiple Listing Services or in the case of Coldwell Banker Residential Brokerage listings, from the seller of the property (the "Third Pary Content"). BostonRealEstateExperts.com presents and makes available such content and information through the BostonRealEstateExperts.com Web site as a public service, for the sole purposes of aiding you, the individual consumer. Because the information is contained from third party sources, BostonRealEstateExperts.com cannot guarantee the accuracy, sufficiency, correctness, veracity, completeness, or timeliness of such information. You are responsible for confirming the sufficiency and reliability of such information. This website is NOT the official website of Coldwell Banker Residential Brokerage. www.BostonRealEstateExperts.com is brought to you by Eric Glassoff NUMBER1EXPERT™ in real estate for Brookline, Newton and Boston, Massachusetts, condos Read Eric Glassoff's Privacy Guarantee, Terms of Service, and Free & Without Obligation Pledge

NUMBER1EXPERT™
© Best Image Marketing and/or its clients.
All rights reserved. All information deemed reliable but not guaranteed.