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.

This Financial Calculator requires a Browser with Java Support

User's Guide Manual

To use this calculator effectively:
1. Read the definitions at the end of this page.

2. Enter all of the variables: rate (%) and dollar ($) amount. Select the time frame.

3. Select varieties of options and possibilities.

4. To see the results Click "Calculate" button.

5. To read and print more detailed explanations of the results, click "View Report" button.

Definitions

Mortgage amount	Original or expected balance for your mortgage.
Interest rate	Annual interest rate for this mortgage.
Interest rate after taxes	Annual effective interest rate after taxes are taken into account.
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 you loan amount.
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.

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