The tax deductions you can take for mortgage 
interest and property taxes greatly increase 
the financial benefits of home ownership. 
Here’s how it works. 

Assume: 

$9,877 = Mortgage interest paid (a loan of $150,000 
         for 30 years, at 7 percent, using 
         year-five interest) 
$2,700 = Property taxes (at 1.5 percent on $180,000 
         assessed value)
______

$12,577 = Total deduction 

$3,521.56 = Amount you have lowered your federal 
            income tax (at 28 percent tax rate) 

(12,577 X .28 = $3,521.56) 

Note that mortgage interest may not be deductible 
on loans over $1.1 million. In addition, 
deductions are decreased when total income reaches 
a certain level