 Mortgage amount
 Original or expected balance for your mortgage. Taxpayers can deduct the interest paid on first and second mortgages up to $1,000,000 in mortgage debt (the limit is $500,000 if married and filing separately). Any interest paid on first or second mortgages over this amount is not tax deductible. Home equity loans are limited to $100,000 or the amount of equity you have in your home. Our calculator limits your interest deduction to the interest payment that would be paid on a $1,000,000 mortgage.
 Interest rate
 Annual interest rate for this mortgage.
 Interest rate after taxes
 Annual effective interest rate, after taxes are taken into account. Please note that in addition to the $1,000,000 mortgage debt limit; this calculator assumes that your itemized deductions will exceed the standard deduction for your income tax filing status. If your itemized deductions don't exceed your standard deduction, the benefit of deducting the interest on your home will be reduced or eliminated. For 2009, the standard deductions are $11,400 for married couples filing jointly, $5,700 for married couples filing separately and singles, and $8,350 for heads of household. You should also be aware that the total tax savings may be less for higher incomes that have their allowable itemized deductions phased out.
 Term in years
 The number of years over which you will repay this loan. The most common mortgage terms are 15 years and 30 years.
 Monthly payment
 Monthly principal and interest payment (PI).
 Federal tax rate:
 The marginal Federal tax rate you expect to pay. Use the table below to assist you in estimating your 2009 tax rate.
10% 
$0  16,750 
$0  8,375 
$0  $11,950 
$0  8,375 
15% 
$16,751 68,000 
$8,376 34,000 
$11,951 45,550 
$8,376 34,000 
25% 
$68,001 137,300 
$34,001 82,400 
$45,551 117,650 
$34,001 68,650 
28% 
$137,301 209,250 
$82,401 171,850 
$117,651 190,550 
$68,651 104,625 
33% 
$209,251 373,650 
$171,851 373,650 
$190,551 373,650 
$104,626 186,825 
35% 
over $373,650 
over $373,650 
over $373,650 
over $186,825 
Source: http://www.irs.gov/pub/irsdrop/rp0950.pdf
 State tax rate:
 The marginal state tax rate you expect to pay.
 Annual Percentage Rate (APR)
 A standard calculation used by lenders. It is designed to help borrowers compare different loan options. For example, a loan with a lower stated interest rate may be a bad value if its fees are too high. Likewise, a loan with a higher stated rate with very low fees could be an exceptional value. APR calculations incorporate these fees into a single rate. You can then compare loans with different fees, rates or different terms.
 APR after taxes
 Annual percentage rate after taxes are taken into account. Unlike your aftertax interest rate, the APR after taxes takes closing costs into account.
 Loan origination percent
 The percent of your loan charged as a loan origination fee. For example, a 1% fee on a $120,000 loan would cost $1,200.
 Discount points
 Total number of "points" purchased to reduce your mortgage's interest rate. Each "point" costs 1% of your loan amount. As long as the points paid are not a broker's commission, they are considered tax deductible in the year that they were paid.
 Other fees
 Any other fees that should be included in the APR calculation. These fees can vary by lender, but at a minimum usually includes prepaid interest.
