MCC Mortgage Credit Certificate Calculator

Formula

The formula to calculate the Monthly Mortgage Payment (MP) with an MCC is:

\[ MP = \left(\frac{P \times r \times (1 + r)^n}{(1 + r)^n - 1}\right) \times (1 - MCC) \]

Where:

$MP$ is the monthly mortgage payment
$P$ is the principal loan amount
$r$ is the monthly interest rate
$n$ is the total number of monthly payments
$MCC$ is the Mortgage Credit Certificate, which represents the percentage of the mortgage interest that can be claimed as a tax credit

What is a Mortgage Credit Certificate (MCC)?

A Mortgage Credit Certificate (MCC) is a tax credit that allows eligible homeowners to claim a portion of the mortgage interest they pay each year as a direct tax credit, which reduces the amount of federal taxes owed. The percentage of the mortgage interest that can be claimed as a tax credit is specified by the MCC.

Example Calculation

Let's assume the following values:

Principal Loan Amount (P) = $200,000
Monthly Interest Rate (r) = 0.004 (which is 4.8% annually)
Total Number of Monthly Payments (n) = 360 (which is 30 years)
Mortgage Credit Certificate (MCC) = 0.2 (which is 20%)

Using the formula to calculate the Monthly Mortgage Payment (MP) with MCC:

\[ MP = \left(\frac{P \times r \times (1 + r)^n}{(1 + r)^n - 1}\right) \times (1 - MCC) = \left(\frac{200000 \times 0.004 \times (1 + 0.004)^{360}}{(1 + 0.004)^{360} - 1}\right) \times (1 - 0.2) = \$839.5 \]

The Monthly Mortgage Payment (MP) with MCC is $839.5.