Mortgage calculator which includes mortgage deduction?
August 17, 2008 · Print This Article
avocaronico asked:
I’m looking for a decent mortgage calculator which factors in the mortgage deduction. Basically my goal is to be able to forecast my monthly payment as accurately as possible. Thanks!
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I’m looking for a decent mortgage calculator which factors in the mortgage deduction. Basically my goal is to be able to forecast my monthly payment as accurately as possible. Thanks!
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Josh Dunaway has been a certfied Realtor in the suburban Chicagoland area for over 20 years. Aside from starting his own real estate company, he also owns a mortgage company as well.
Look at calculated industries real estate qualifier 2 at this website. +-+Compact+Desktop.html
It has the features you are seeking, is inexpensive, and is very easy to use.
There’s no calculator I know of that’s going to automatically calculate your mortgage deduction, but nevertheless it’s still fairly easy to calculate. The calculator I’d recommend is the HP 12C, which I’ve used for over 20 years - they haven’t changed it in all that time, and it’s still the standard tool in the financial industry. You’ll have to get used to the “Polish logic” method of info input, but again, it’s not too difficult.
Your mortgage payment is easy to calculate on the calculator. Your just enter the number of payment periods, interest rate, and present value, and it’ll give you the payment. Your mortgage payment won’t change on a fully amortized loan, regardless of your deduction.
To calculate your mortgage deduction, just take the total interest paid for the year and multiply times your marginal tax rate. For example: if you have a $400,000 fully amortized loan at 6% interest, your monthly payment would be $2,398.20, or $28,778.40 per year. Of that amount the first year, $23,866.38 would be interest. If you’re in a 25% tax bracket, your deduction would be $5,966.59, or an average $497.22 per month. The deduction will gradually decrease over time as more of your monthly payment represents principal and less represents interest.
So that it’s easier to see each month, I’d recommend creating an amortization schedule on an Excel spreadsheet. With this schedule, you’ll be able to see how much of each payment goes toward interest and how much goes toward principal, for each and every month of the entire loan. Again, there’s a short learning curve, but it would give you exactly what you’re looking for. You can create such a schedule in just a couple of minutes.
I have a great calculator on my website that could help you with this, click on Total Cost and Benfits Calculator at
OR try