Mortgage Tax Savings

If you itemize, mortgage interest is deductible. See roughly what it saves.

Your numbers

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Tax savings

First-year savings
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A simplified estimate: first-year interest times your marginal rate, assuming you itemize and the interest exceeds the standard deduction benefit. Many filers take the standard deduction instead. Not tax advice.
About this calculator

Mortgage Tax Savings

A mortgage interest tax savings calculator estimates how much you save on income tax by deducting mortgage interest, if you itemize deductions rather than taking the standard deduction.

How the deduction works

Mortgage interest on a primary (and sometimes second) home is deductible if you itemize. The savings equal the interest times your marginal tax rate, so a higher bracket means a bigger benefit. Interest is highest in the early years of a loan, so the deduction is largest then and shrinks over time.

Itemizing vs. the standard deduction

The deduction only helps if your total itemized deductions exceed the standard deduction, which is large for most filers. Many homeowners find the standard deduction is bigger, so they get no extra benefit from mortgage interest. Add up all your itemized deductions before assuming the mortgage saves you tax.

How to use it

  1. Enter your loan amount and interest rate.
  2. Enter your marginal tax rate.
  3. See the first-year interest and estimated tax savings.
  4. Compare against the standard deduction before relying on it.

Frequently asked questions

Is mortgage interest tax deductible?

Yes, if you itemize deductions, on up to a limit of mortgage debt. If you take the standard deduction, there's no additional benefit.

How much does the mortgage interest deduction save?

Roughly the interest paid times your marginal tax rate, but only for the amount your itemized deductions exceed the standard deduction.

Should I keep a mortgage just for the tax break?

Rarely. You spend a dollar of interest to save only your tax rate on it, so it's not a reason on its own to carry debt.

See the exact formula and a worked example on our methodology page.

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