How much do I save on taxes from mortgage interest?

Tax savings = (mortgage interest paid) × (your marginal tax rate), but only if you itemize. Most homeowners save $0 because they take the standard deduction.

The actual tax savings from mortgage interest is often less than people expect. The math: tax savings = (deductible interest) × (marginal tax rate), but only if you itemize. Itemizing only makes sense if your total itemized deductions (mortgage interest + property tax up to $10K SALT cap + charitable + state tax) exceed the standard deduction. For 2024, standard deduction is $14,600 single / $29,200 married filing jointly. Working example: $400K mortgage at 7% rate. Year 1 interest: ~$28K. Property tax: $5K (within SALT cap). Charitable: $3K. State tax: capped at $10K SALT. Total itemized: $28K + $10K (SALT cap, including property tax + state tax) + $3K = $41K. Standard deduction $29,200. Itemizing benefit: $41K - $29.2K = $11.8K. At 22% marginal rate: tax savings $2,596. NOT $28K × 22% = $6,160. Many homeowners miscalculate by multiplying full interest by their tax rate. The benefit is only the EXCESS over standard deduction. As mortgage balance pays down, interest decreases and the itemizing benefit shrinks. Many homeowners switch back to standard deduction in years 5-15 of a 30-year loan. Smaller mortgages ($200K and under) typically don't produce enough interest to make itemizing worthwhile.