Mortgage Interest by State Calculator
Calculate your combined federal AND state mortgage interest tax savings. Unlike a standard federal-only deduction calculator, this tool models state income tax rules — comparing across 12 states, running the $10,000 SALT cap analysis, and projecting deduction value over the full life of your loan.
Combined federal + state deduction value for $18,000 in mortgage interest across 12 major states. States with no income tax show federal savings only.
| State | Income Tax | State Rate | Federal Savings | State Savings | Total Savings |
|---|---|---|---|---|---|
| New Jersey | Yes | 9.0% | $1,848 | $1,615 | $3,463 |
| Oregon | Yes | 9.9% | $1,848 | $1,542 | $3,390 |
| California * | Yes | 9.3% | $1,848 | $1,190 | $3,038 |
| Massachusetts | Yes | 5.0% | $1,848 | $900 | $2,748 |
| New York | Yes | 6.8% | $1,848 | $685 | $2,533 |
| Virginia | Yes | 5.8% | $1,848 | $575 | $2,423 |
| Minnesota | Yes | 9.8% | $1,848 | $337 | $2,185 |
| Illinois | Yes | 5.0% | $1,848 | $0 | $1,848 |
| Texas | No | — | $1,848 | $0 | $1,848 |
| Florida | No | — | $1,848 | $0 | $1,848 |
| Nevada | No | — | $1,848 | $0 | $1,848 |
| Washington | No | — | $1,848 | $0 | $1,848 |
* Your currently selected state. Federal savings assume itemized deductions exceed standard deduction by the mortgage interest amount.
The Alternative Minimum Tax (AMT) is a parallel tax system. If AMT exceeds your regular tax, you lose some deduction benefits. Mortgage interest is allowed under AMT for primary residence only.
Federal vs. State Mortgage Interest Deduction: Key Differences
The federal mortgage interest deduction is widely known, but most homeowners overlook the state-level dimension. Federal rules allow you to deduct interest on up to $750,000 of mortgage debt (for loans originated after December 15, 2017) if you itemize. But whether you get an additional state benefit depends entirely on your state's tax code — and the rules vary widely.
States fall into three categories: those that conform to federal deduction rules (CA, VA, OR, MN), those with an income tax that disallow itemized deductions (IL), and those with no income tax at all (TX, FL, NV, WA). If you live in a high-income-tax state that allows itemized deductions, your effective combined deduction rate can exceed 30%.
How Combined Deduction Value Is Calculated
State Savings = (Mortgage Interest − State Standard Deduction) × State Rate
Total Savings = Federal Savings + State Savings
Effective Deduction Rate = Total Savings ÷ Annual Mortgage Interest × 100%
Example: California Homeowner vs. Texas Homeowner
$500,000 Mortgage at 6.75% — Year 1 Interest ~$33,000
| Filing Status | Married Filing Jointly |
| Annual Mortgage Interest | $33,000 |
| Federal Marginal Rate | 24% |
| Federal Standard Deduction (MFJ) | $29,200 |
| Federal Itemized Total | $43,000 (interest + $10K SALT) |
| Federal Savings (CA and TX same) | $3,312 |
| California State Rate | 9.3% |
| California State Savings | ~$2,400 |
| Texas State Rate | 0% (no income tax) |
| Texas State Savings | $0 |
| Total Savings: California | $5,712 |
| Total Savings: Texas | $3,312 |
The California homeowner saves $2,400 more per year from the same mortgage, purely due to state income tax allowing a mortgage interest deduction.
The $10,000 SALT Cap Explained
The Tax Cuts and Jobs Act of 2017 capped the federal deduction for State and Local Taxes (SALT) at $10,000. This includes property taxes, state income taxes, and local taxes combined. If you pay $8,000 in property tax and $7,000 in state income tax, only $10,000 is deductible federally — you lose the $5,000 excess.
This cap primarily hurts homeowners in high-tax states: New York, New Jersey, California, Connecticut, and Illinois. In these states, many taxpayers who previously itemized now find the standard deduction more favorable — which means their mortgage interest provides zero additional federal tax savings.
SALT Cap Impact by State (Approximate Annual Tax Cost)
| New Jersey homeowner, $15K SALT | $5K lost × 24% = $1,200 extra federal tax |
| California homeowner, $18K SALT | $8K lost × 22% = $1,760 extra federal tax |
| New York homeowner, $20K SALT | $10K lost × 32% = $3,200 extra federal tax |
| Texas homeowner, $6K SALT | Under cap — no impact |