Understanding and Calculating Your Mortgage Credit Certificate (MCC)

Calculate the amount or remittance you can expect to receive as your annual mortgage credit certificate, or MCC. State and local governments operate MCC programs to provide incentive for residents to own homes. An MCC allows the homeowner to deduct a certain portion of his mortgage interest from his yearly taxes, lessening his overall tax burden.

Step 1

Contact your state or city's department of housing to find out the value of the MCC percentage rate. This value represents the percentage of your mortgage interest you are permitted to write off on your taxes.

Step 2

Multiply the total amount of your mortgage by the annual interest rate to calculate the amount of interest you paid in a given year. If your mortgage is for $200,000 and the interest rate is 5 percent, do this as follows: 200,000 x .05 = $10,000.

Step 3

Apply the MCC rate to the amount of interest. If your state's or city's MCC rate is 20 percent, calculate the MCC on the example mortgage as follows: 10,000 x .2 = $2,000.

Tip

Some cities and states impose an upper limit on the amount of the MCC. If you have a large mortgage or high interest rate, make sure your state doesn't limit the amount of the MCC to avoid raising your expectations too high.