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 Arizona Public, Private and Charter Schools: Compare them using these top-rated, comprehensive reports.   Schools in Fountain Hills, Scottsdale and Phoenix

Financing Your Home >The Loan Application When you have decided on a mortgage lender, you begin the loan process by filling out a loan application. You should be fully prepared to go over your current financial situation and credit history with the loan officer. Have a record of all of your current bank accounts, including the name and address of bank(s), type of account(s), and approximate balance(s). Be prepared to provide details about outstanding loans, including student loans and major credit accounts. You will also need information about your assets, such as car title, stocks and bonds, and life insurance policies. If you foresee any credit problems, ask the loan officer for advice on how to keep them from interfering with approval of your mortgage loan. The loan officer can usually give you a prompt opinion about your chances for obtaining a mortgage. See All Tips In The "Financing Your Home" Category > See Complete Library Of Hundreds Of Tips In 30+ Categories >

Q  What weighs 320 tons and is considered the largest single block building? A  Pyramid of Mycerinus (Third Pyramid) at El Gizeh, Egypt is the largest single block building and the world's oldest pyramid. See More Real Estate Trivia >

Lisa Murray - ABR, GRI, CRS RE/MAX Sun Properties 16704 E. Ave. of the Fountains, #101 Fountain Hills, AZ 85268 Phone: 602-400-0250 Fax: 480-718-8291 Toll Free: 888-311-4833 Email: Lisa@ISellFountainHillsAZ.com I am a full time residential real estate specialist. I work with both buyers and sellers in Fountain Hills and surrounding communities. My goal is to provide you with the highst quality service that will "Exceed Your Expectations". www.FountainHillsExpert.com is brought to you by Lisa Murray GRI, ABR, CRS REALTOR NUMBER1EXPERT™ in real estate for Fountain Hills, Scottsdale and Phoenix, Arizona Read Lisa Murray'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.