How the Tax Benefits of Buying Calculator Works

This calculator estimates the value of itemizing your mortgage interest and property tax as federal/state deductions instead of taking the standard deduction: it totals your annual mortgage interest (pulled from your amortization schedule - remember, interest is front-loaded, so the deduction is largest in your early years and shrinks as you pay down principal) plus your annual property tax, then multiplies the deductible portion by your estimated marginal tax rate to get an approximate annual tax savings.

California rules & 2026 figures that apply

• The federal mortgage interest deduction caps acquisition debt at $750,000. California does not conform to that federal cap - a CA state return can still deduct interest on up to $1 million of acquisition debt on a qualified principal residence, so some CA homeowners can deduct more on their state return than on their federal return. This is general information, not tax advice - confirm your situation with a CPA (California FTB, 2025 Schedule CA (540) instructions).
• Under California's Proposition 13, the base property tax rate is 1% of assessed value; with voter-approved local bonds and assessments layered on top, most Sacramento County parcels land at an effective rate of roughly 1.05%-1.3% (about 1.10% within Sacramento city limits) (JVM Lending, Sacramento Property Taxes 2026). Buying a home also triggers a one-time supplemental property tax bill once the county reassesses to the new purchase price.
• For 2026, the federal SALT (state and local tax) deduction cap - which includes property tax - is $40,400 for most filers (up from the $10,000 cap that applied 2018-2025), phasing down for filers with modified AGI over $500,000 (Jackson Hewitt, 2026 SALT Deduction).

Estimates only, not a commitment to lend. Figures above reflect publicly reported 2026 program limits and CA tax rules as of this writing and can change - confirm current numbers and your specific eligibility with one of our loan officers before making a decision. The Home and Commercial Loan Company, Inc. is an Equal Housing Opportunity lender, NMLS #1665729.