Mortgage debt consolidation calculator: Should you obtain a mortgage to consolidate debts?
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Mortgage Debt Consolidation
Debt Consolidation
- This calculator is designed to determine whether obtaining a mortgage to consolidate your debt - debt consolidation - is right for you. Enter your current obligations -- credit cards, installment loans and mortgage loans -- that you wish to consolidate by clicking on the "Enter Data" button for each category. Change the consolidated mortgage loan amount, term or rate to create a loan that will work within your budget. Click the "View Report" button for detailed results.
Mortgage Debt Consolidation - Definitions
Mortgage amount - Original or expected balance for your mortgage loan. 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. 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 2006, the standard deductions are $10,300 for married couples filing jointly, $5,150 for married couples filing separately and singles, and $7,550 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. We also do not consider any tax savings you might have previously had if you are consolidating an existing mortgage loan.
Interest rate - Annual interest rate for this mortgage loan.
Term - The number of years over which you will repay this mortgage loan. The most common mortgage terms are 15 years and 30 years.
Payment - Monthly principal and interest payment (PI) for this mortgage loan.
Combined State and Federal income tax rate - The marginal combined state and Federal tax rate you expect to pay. Use the table below to help you determine your Federal tax rate.