Mortgage Tax Savings Calculator
Interest and points paid for a home mortgage are tax deductible. Use this calculator to determine how much your mortgage could save you in income taxes.
How the mortgage tax savings calculator works
It sums the first year’s mortgage interest from the amortization schedule, multiplies by your marginal tax rate to find the deduction’s value, and lowers your rate accordingly to show the effective after-tax cost.
Worked example: with loan amount of $300,000, interest rate of 6.50% and loan term (years) of 30, the mortgage tax savings calculator shows first-year tax savings of $4,656.
- First-year interest
- $19,401
- Tax savings
- $4,656
- After-tax interest rate
- 4.94%
- Monthly tax benefit
- $388.03
The formula
Tax savings = first-year interest × marginal tax rate. After-tax rate = rate × (1 − tax rate).
Results are estimates for educational purposes and are not financial advice. Confirm exact figures with your lender, plan administrator or advisor.
Questions about the mortgage tax savings calculator
Is mortgage interest tax-deductible?
It can be, if you itemize deductions. Since the 2018 increase in the standard deduction, many homeowners no longer itemize and so get no benefit — check which applies to you.
How much does the deduction save?
Your deductible interest times your marginal tax rate. The calculator shows the first-year savings, which shrink over time as more of each payment goes to principal.
Does the deduction make a mortgage “free” money?
No. You still pay the interest; the deduction only refunds a fraction of it. The after-tax rate shown is your true borrowing cost when the deduction applies.
Is the Mortgage Tax Savings Calculator free to use?
Yes. Every calculator on FinCalculators is completely free, with no sign-up, login or paywall. You can run as many scenarios as you like.