Receive a 40% tax credit on the interest you pay each and every year you have the mortgage with a max of $2,000 per year. This is cash to you, not a deduction
Below is an example of the MCC Tax Savings. It assumes a family purchases a home with a $200,000 loan amount at a 5% interest rate. Interest paid the first year is approximately $10,000.
Mortgage Amount $200,000
Interest Rate 5%
Interest Paid $10,000
MCC Tax Credit Rate 40%
Tax Credit Amount $4,000
Maximum Credit Amount* $2,000
*In this example, the home buyer would be entitled to a tax credit of the maximum $2,000. With this scenario the buyer would receive the full $2,000 a year for the first 14 to 15 years of the loan (if making only the scheduled payment) which comes out to a minimum of $28,000 and then starts to go down as the loan is paid off.