Question

You plan to buy a house in July 2019. The sale price is $350,000. You need to pay 20% down payments and borrow additional 80% from Wells Fargo with a traditional 15-year, 3.6% fixed-rate mortgage loan. You are expected to pay an equal MONTHLY payment starting from August 2019 for a total of 15 years.

(1) Calculate your expected monthly mortgage payment.

(2) Develop the 2019~2034 amortization table for your mortgage loan.

(1) When you prepare your 2019 tax filing, what is the total mortgage interest payment that you can consider for the tax deduction?

Answer 1

(1): Here the amount borrowed = 350,000*(1-20%) = $280,000

Nper (or term) = 15 years*12 months per year = 180 months. r = 3.6%/12 (as payments are monthly)

Thus expected monthly payment = PMT(3.6%/12, 180, 280000)

= $2,015.45

(2): The 2019-2034 amortization table is provided below:

Period	Loan due at the start of the month	Monthly payment	Interest	Principal paid	Loan due at the end of the month
1 (August 2019)	280,000.00	2,015.45	840.00	1,175.45	278,824.55
2	278,824.55	2,015.45	836.47	1,178.98	277,645.57
3	277,645.57	2,015.45	832.94	1,182.51	276,463.06
4	276,463.06	2,015.45	829.39	1,186.06	275,277.00
5	275,277.00	2,015.45	825.83	1,189.62	274,087.38
6	274,087.38	2,015.45	822.26	1,193.19	272,894.20
7	272,894.20	2,015.45	818.68	1,196.77	271,697.43
8	271,697.43	2,015.45	815.09	1,200.36	270,497.07
9	270,497.07	2,015.45	811.49	1,203.96	269,293.11
10	269,293.11	2,015.45	807.88	1,207.57	268,085.54
130	95,178.74	2,015.45	285.54	1,729.91	93,448.82
131	93,448.82	2,015.45	280.35	1,735.10	91,713.72
132	91,713.72	2,015.45	275.14	1,740.31	89,973.41
133	89,973.41	2,015.45	269.92	1,745.53	88,227.88
134	88,227.88	2,015.45	264.68	1,750.77	86,477.12
135	86,477.12	2,015.45	259.43	1,756.02	84,721.10
136	84,721.10	2,015.45	254.16	1,761.29	82,959.81
137	82,959.81	2,015.45	248.88	1,766.57	81,193.24
138	81,193.24	2,015.45	243.58	1,771.87	79,421.37
139	79,421.37	2,015.45	238.26	1,777.19	77,644.19
140	77,644.19	2,015.45	232.93	1,782.52	75,861.67
141	75,861.67	2,015.45	227.59	1,787.86	74,073.80
142	74,073.80	2,015.45	222.22	1,793.23	72,280.58
143	72,280.58	2,015.45	216.84	1,798.61	70,481.97
144	70,481.97	2,015.45	211.45	1,804.00	68,677.96
145	68,677.96	2,015.45	206.03	1,809.42	66,868.55
146	66,868.55	2,015.45	200.61	1,814.84	65,053.71
147	65,053.71	2,015.45	195.16	1,820.29	63,233.42
148	63,233.42	2,015.45	189.70	1,825.75	61,407.67
149	61,407.67	2,015.45	184.22	1,831.23	59,576.44
150	59,576.44	2,015.45	178.73	1,836.72	57,739.72
151	57,739.72	2,015.45	173.22	1,842.23	55,897.49
152	55,897.49	2,015.45	167.69	1,847.76	54,049.73
153	54,049.73	2,015.45	162.15	1,853.30	52,196.43
154	52,196.43	2,015.45	156.59	1,858.86	50,337.57
155	50,337.57	2,015.45	151.01	1,864.44	48,473.14
156	48,473.14	2,015.45	145.42	1,870.03	46,603.11
157	46,603.11	2,015.45	139.81	1,875.64	44,727.47
158	44,727.47	2,015.45	134.18	1,881.27	42,846.20
159	42,846.20	2,015.45	128.54	1,886.91	40,959.29
160	40,959.29	2,015.45	122.88	1,892.57	39,066.72
161	39,066.72	2,015.45	117.20	1,898.25	37,168.47
162	37,168.47	2,015.45	111.51	1,903.94	35,264.52
163	35,264.52	2,015.45	105.79	1,909.66	33,354.87
164	33,354.87	2,015.45	100.06	1,915.38	31,439.48
165	31,439.48	2,015.45	94.32	1,921.13	29,518.35
166	29,518.35	2,015.45	88.56	1,926.89	27,591.46
167	27,591.46	2,015.45	82.77	1,932.68	25,658.78
168	25,658.78	2,015.45	76.98	1,938.47	23,720.31
169	23,720.31	2,015.45	71.16	1,944.29	21,776.02
170	21,776.02	2,015.45	65.33	1,950.12	19,825.90
171	19,825.90	2,015.45	59.48	1,955.97	17,869.93
172	17,869.93	2,015.45	53.61	1,961.84	15,908.09
173	15,908.09	2,015.45	47.72	1,967.73	13,940.36
174	13,940.36	2,015.45	41.82	1,973.63	11,966.73
175	11,966.73	2,015.45	35.90	1,979.55	9,987.18
176	9,987.18	2,015.45	29.96	1,985.49	8,001.70
177	8,001.70	2,015.45	24.01	1,991.44	6,010.25
178	6,010.25	2,015.45	18.03	1,997.42	4,012.83
179	4,012.83	2,015.45	12.04	2,003.41	2,009.42
180 (July 2034)	2,009.42	2,015.45	6.03	2,009.42	0.00

(3) 2019 interest payment = 840+836.47+832.94 + 829.39 + 825.83

= $4,164.63. This amount of mortgage interest payment will be considered for tax deduction.