Calculating your monthly real estate deductibles (primary residence)
Mortgage, at current rates you will pay about $425 per month for every $100,000 of debt. This cost is fixed for the length of the lock rate of the loan.
Taxes and common charges (billed as Maintenance in co-ops) are set costs that usually go up 1-5% each year.
100% of interest payments of total interest on $750,000 of a mortgage for a primary residence.
$10,000 of taxes per year on your primary residence.
How deductions work.
Annually you pay income taxes. You pay these taxes based upon your income. If your income is $100,000 for a year and your tax bracket is at 40% then you pay $40,000 in taxes.
To realize the tax benefits of owning a home take your tax the deductions from your primary residence and reduce your income by that amount. So if you earn $100,000 but you have $10,000 in tax deductions for real estate you will only pay taxes on $90,000 of income. If your tax becket is 40% then you will pay $36,000. You are saving $4,000 in this scenario.
How to calculate your deductions
Taxes are easy, it’s what your tax payments for the year are, up to 10K.
Interest, for the first several years interest will make up about 75% of your mortgage payments. Here is a great interest payment calculator you can use HERE