With Coldwell Banker’s Home Financial Calculators, you can find the answers to many of your real estate related mortgage and finance questions. Check out this Tax Savings Calculator below!
HOW MUCH CAN I SAVE IN TAXES?
The after-tax interest rate is the interest rate on a loan after you deduct tax expense. By calculating this rate, you can estimate the yearly tax savings on a mortgage loan.
When purchasing a home, closing costs are generally not tax-deductible. However, charges for a specific interest rate may be amortized over the term of the loan if you are refinancing. And if you are purchasing a new home, these charges may even be fully deductible.
Assuming no other changing factors, tax savings on a mortgage loan increase at higher income tax rates. This is because mortgage interest is generally tax-deductible, which would reduce the after-tax interest rate. For example, if your loan rate is 6% and your income tax rate is 25%, your after-tax interest rate is 4.5%.
To see how much you can save in taxes, click HERE!