A $12,000 refund driven by the mortgage interest deduction alone would be unusual, so walk through how the deduction actually works before trusting the simulation. The two housing items you might deduct are mortgage interest and property taxes, and three limits shrink both: - State and local taxes (property tax plus state income tax) are capped at a combined limit, and in a high-tax state that cap can be eaten up by state income tax alone, leaving little room for property tax. The cap has changed with recent tax law, so confirm the current figure. - Mortgage interest is deductible only on a limited amount of mortgage debt. - Itemizing only helps if your total deductions clear the standard deduction, which is fairly high and adjusts every year. As an illustration, a $400,000 loan at 7% is roughly $28,000 of first-year interest. A smaller loan at a lower rate produces far less and may never beat the standard deduction, in which case the mortgage writeoff does nothing for you. The deduction gets more valuable with a larger balance or a higher rate. Also remember what a refund is: money that was over-withheld from your paychecks during the year, coming back to you. Run the specifics with a tax professional, since the limits move.