How much money does the tax deductable for a home purchase save me?

20% down on house or pay off low interest credit card and/or car?

We are planning on buying a new house. We have enough money to put a 20% down payment. We also have credit card and car payment debt that is a little less than the 20% we could use for the house. The interest rate on the card is 4.99%. The car loan is 6.4%. The home loan will probably be 6+%. Since the interest rate on the credit card is less than the rate of the home loan, would it be better to put the 20% down on the house and then try to pay off the card and car loan in a few years or would it be better to pay off the card and car loan now and and just put 5% down on the house and have to pay PMI? Or maybe something in between like pay off the card but not the car (or vice versa) and put 10% down on the house. Is there a calculator out there somewhere to calculate the cheapest route? Thanks... We are working on paying down the credit card and car loan. At current rate they should both be paid off in about 4 years.

Pay off the car and credit first. The interest on the house is tax deductible, where as the others are not. so 6.25% on the mortgage actually becomes (6.25% x (1-marginal tax rate (say 25%) = 4.68%. As long as your PMI is less than (6.25% - 4.68%) 1.57% of your home value it is worth paying off your other debt first.



I would like to understand the tax benefits of buying a house a bit better and how to do the math. If I get a 400.000 loan over 30 years at a 5% interest rate, then my monthly payments will be somewhere between $2100 and $2300 (based on online home loan calculator). I understand that the interest on the loan is tax deductible part. Can anyone help me figuring out how much money that would save me per year?
The answer would depend upon your tax bracket. For example, if after other deductions you are in the 25% bracket, the tax savings would be the amount of interest paid that year times 25%.