Mortgage Tax Calculator

Your mortgage interest may reduce your taxable income.

This calculator helps you estimate how much you could save in federal and state taxes during the first year of your loan.

Benefits

• Estimate how much mortgage interest you can deduct
• See your potential first-year federal and state tax savings
• Understand how your tax rate affects your savings
• Plan your budget with a clearer picture of your actual homeownership cost

Formula

Your tax savings are calculated based on:

• First-Year Mortgage Interest: The total interest paid in year one.
• Federal Tax Rate: The percentage used to estimate your federal tax savings.
• State Tax Rate: The percentage used to estimate your state tax savings.

The calculator multiplies your first-year interest by your combined tax rate to estimate your total potential savings.

Terms

• Mortgage Amount: The total loan balance at the start of repayment.
• Interest Rate: The annual cost of borrowing money.
• Term in Years: The length of the loan, which affects your first-year interest amount.
• Federal Tax Rate: The percentage of income you pay in federal taxes.
• State Tax Rate: Your state income tax percentage, if applicable.

Factors to Consider

• Your savings depend on whether you itemize deductions instead of taking the standard deduction.
• Tax laws change, and your actual savings may differ based on filing status and eligibility.
• State tax rates vary widely, and some states do not collect income tax.
• The amount of interest you pay decreases over time, so savings may be higher in early years.