Mortgage True Cost Calculator
Discover the real after-tax cost of your home. This calculator models standard amortization alongside advanced federal tax deductions, revealing exactly how much you save. For example, a $300,000 mortgage at 6.5% with $100,000 in annual income could save thousands in year one through mortgage interest deductions alone.
Mortgage Details
Tax Analysis
Effective Monthly Cost (Year 1)
* Monthly tax savings will fluctuate over time as your principal decreases and you pay less interest.
Amortization Curve
Annual Tax Savings Over Time
| Month | Payment | Principal | Interest | Tax Savings Estimated federal tax savings from mortgage interest and SALT deductions. Only includes housing-related deductions — charitable contributions and other itemized deductions are not modeled. | Balance |
|---|---|---|---|---|---|
| Month 1 | $1,520.12 | $216.12 | $1,304.00 | $56.27 | $239,783.88 |
| Month 12 | $1,520.12 | $229.39 | $1,290.73 | $56.27 | $237,327.66 |
| Month 24 | $1,520.12 | $244.80 | $1,275.32 | $52.98 | $234,475.77 |
| Month 36 | $1,520.12 | $261.25 | $1,258.87 | $49.46 | $231,432.27 |
| Month 48 | $1,520.12 | $278.80 | $1,241.32 | $45.71 | $228,184.28 |
| Month 60 | $1,520.12 | $297.54 | $1,222.58 | $41.71 | $224,718.08 |
| Month 72 | $1,520.12 | $317.52 | $1,202.60 | $37.44 | $221,019.02 |
| Month 84 | $1,520.12 | $338.86 | $1,181.26 | $32.89 | $217,071.44 |
| Month 96 | $1,520.12 | $361.62 | $1,158.50 | $28.02 | $212,858.64 |
| Month 108 | $1,520.12 | $385.92 | $1,134.20 | $22.84 | $208,362.82 |
| Month 120 | $1,520.12 | $411.85 | $1,108.27 | $17.30 | $203,564.93 |
| Month 132 | $1,520.12 | $439.52 | $1,080.60 | $11.39 | $198,444.70 |
| Month 144 | $1,520.12 | $469.04 | $1,051.08 | $5.08 | $192,980.48 |
| Month 156 | $1,520.12 | $500.56 | $1,019.56 | $0.00 | $187,149.15 |
| Month 168 | $1,520.12 | $534.19 | $985.93 | $0.00 | $180,926.05 |
| Month 180 | $1,520.12 | $570.07 | $950.05 | $0.00 | $174,284.86 |
| Month 192 | $1,520.12 | $608.37 | $911.75 | $0.00 | $167,197.48 |
| Month 204 | $1,520.12 | $649.25 | $870.87 | $0.00 | $159,633.94 |
| Month 216 | $1,520.12 | $692.87 | $827.25 | $0.00 | $151,562.25 |
| Month 228 | $1,520.12 | $739.42 | $780.70 | $0.00 | $142,948.28 |
| Month 240 | $1,520.12 | $789.09 | $731.03 | $0.00 | $133,755.61 |
| Month 252 | $1,520.12 | $842.11 | $678.01 | $0.00 | $123,945.31 |
| Month 264 | $1,520.12 | $898.68 | $621.44 | $0.00 | $113,475.92 |
| Month 276 | $1,520.12 | $959.06 | $561.06 | $0.00 | $102,303.14 |
| Month 288 | $1,520.12 | $1,023.50 | $496.62 | $0.00 | $90,379.74 |
| Month 300 | $1,520.12 | $1,092.26 | $427.86 | $0.00 | $77,655.26 |
| Month 312 | $1,520.12 | $1,165.64 | $354.48 | $0.00 | $64,075.91 |
| Month 324 | $1,520.12 | $1,243.95 | $276.17 | $0.00 | $49,584.26 |
| Month 336 | $1,520.12 | $1,327.53 | $192.59 | $0.00 | $34,118.99 |
| Month 348 | $1,520.12 | $1,416.72 | $103.40 | $0.00 | $17,614.69 |
| Month 360 | $1,521.70 | $1,513.48 | $8.22 | $0.00 | $0.00 |
Methodology
This calculator applies precise, month-by-month mathematical modeling for both the mortgage and the resulting tax implications. It runs a parallel tax simulation for each year: one taking the standard deduction, and another itemizing state and local taxes (SALT) alongside deductible mortgage interest.
To be tax deductible, IRS regulations cap eligible mortgage debt at $750,000. If your loan amount exceeds this, the deductible interest is strictly pro-rated. State income taxes and annual property taxes are grouped under the SALT deduction, strictly capped by the ongoing 2026 tax law limit.
Disclaimer: This calculator models 2026 federal tax rules for single filers. It does not account for state-level deductions, AMT, charitable contributions, or other itemized deductions. Consult a tax professional for advice specific to your situation.
Frequently Asked Questions
What is the true cost of a mortgage?
The true cost considers your monthly payment minus the federal tax savings you achieve by itemizing mortgage interest and property taxes.
How does the SALT deduction affect my mortgage costs?
The State and Local Tax (SALT) deduction allows you to deduct property taxes and state income taxes up to the 2026 cap of $40,400. This provides a substantial baseline for your itemized deductions, making it easier for your mortgage interest to push you past the $16,100 standard deduction limit and generate real tax savings.
What mortgage debt is tax deductible?
Under current IRS regulations, you can deduct the interest paid on the first $750,000 of your mortgage debt. If your loan amount exceeds this cap, the deductible portion of your interest is strictly prorated based on that limit.
When does the mortgage interest tax deduction phase out?
As you pay down your mortgage over time, the proportion of your payment going toward interest naturally decreases. Eventually, you will reach a 'crossover year' where your total itemized deductions (SALT plus mortgage interest) fall below the standard deduction, at which point the tax shield expires.
How does the calculator compare standard vs itemized deductions?
The calculator runs a parallel tax simulation for each year of your loan. It calculates your tax liability taking the $16,100 standard deduction, then compares it against itemizing your SALT and eligible mortgage interest, calculating the exact dollar amount saved by choosing the optimal path.
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Bret Mishler
Bret Mishler is the founder and lead developer of MoneyMage. As a Senior Software Engineer and Tech Lead specializing in enterprise-scale cloud billing systems, Bret brings production-grade financial engineering rigor to personal finance. He built MoneyMage to deliver mathematically transparent, lightning-fast financial tools — applying the same strict precision required to process billions of dollars in cloud infrastructure to your personal wealth.
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