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.

Working With An Agent >An Agents Role Recent reforms in the disclosure laws and real estate practices around the country have resulted in new options for buyers and sellers. Real estate agents can take different roles with buyers and sellers. A seller's agent works with loyalty and fidelity as the seller's advocate and negotiator, and is obligated to disclose to potential buyers all adverse material facts that are known about the property. A buyer's agent works exclusively to negotiate the lowest purchase price and best terms for the buyer. This agent serves the buyer with undivided loyalty, confidentiality, and full disclosure. The agent would know the highest price that the buyer would be willing to offer for a home, but could not disclose that information to the seller. A dual agent can work for both the buyer and the seller by written, informed consent of both parties and has fiduciary obligations to both. The agent can only disclose to one party what the other party allows to be revealed. A transaction broker assists the buyer or seller or both throughout a real estate transaction without being an agent or advocate for any of the parties. See All Tips In The "Working With An Agent" Category > See Complete Library Of Hundreds Of Tips In 30+ Categories >

Q  What mortgage transactions between borrowers and lending institutions operate in the private sector of the economy? A  Conventional mortgages are private sector transactions that are not insured or guaranteed by the government. See More Real Estate Trivia >

Sean & Christine Remington Prudential Sandia Real Estate 6739 Academy NE, Suite 200 Albuquerque, NM 87109 Sean: 505-307-4006 Christine: 505-977-2004 Fax: 888-291-7121 Sean's Email: Sean@SeanRemington.com Christine's Email: ChristineRNM@gmail.com Don't leave such important decisions in the hands of just any real estate agent. Trust one of New Mexico's Top Real Estate Teams who makes it look fun and easy; Sean & Christine Remington. Having gone the extra mile to pursue extended education in real estate coupled with a heavy volume of experience ensures that when choosing to work with Sean & Christine - you have made the right choice.

www.NMHomesOnline.com is brought to you by Sean & Christine Remington
NUMBER1EXPERT in real estate for Rio Rancho, Corrales and Albuquerque, New Mexico

Read Sean & Christine Remington'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.