How Does the Biweekly Affect My Mortgage Interest Tax Deduction?
Very little the first 15 years. Since 1986, most homeowners tax deductions on mortgage interest were significantly reduced because of the lowering of tax brackets to 15% or 28%. If you are in a 28% tax bracket, every $1 you pay in mortgage interest will only reduce your income taxes a maximum of 28¢. So your net cost of paying $1 in mortgage interest is 72¢. That’s a huge expense to you! Why pay $10,000 in mortgage payments so you can save $2,800 on your taxes? With our uncertain economy today, your real enemy isn’t taxes…it’s debt! Having your home paid off 7-10 years sooner will convert you from “mortgage loanership” to real “debt-free homeownership”! It makes good financial sense to get rid of your mortgage and get out of debt. Put the $10,000 in your pocket, pay $2,800 in taxes, and net $7,200! That’s a net gain of $4,400, plus the peace of mind of owning your home!
