We all know that we can write off mortgage interest when preparing our tax return but how much we can write off and how much of a reduction in taxes can be a bit more complicated to figure out.
Let's use the example of $10,000 in mortgage interest paid and you are in the 25% tax bracket. This means that only 25% of the $10,000 in mortgage interest paid will reduce your taxable income. $2500! That's it! You're going to pay $10,000 to not pay $2500...
The above example is only a reason to not purchase a home solely for the tax "benefit". If you have a growing family, substantial rent increases or other reasons to purchase a home all these things should be considered together when making your final decision.
Remember, always consult a tax professional when making large purchases that may affect your tax return.