Tax literacy
Not a filing form
Points and fees amortization helper
A straight-line educational picture of prepaid mortgage points, with an optional simplified purchase-year deduction illustration.
Educational illustration for tax year 2025 — verify current IRS publications before use. This is a labeled assumption, not an official current-law rate table.
Required inputs
- Points paid (dollars)
- Purchase versus refinance
- Loan principal and term (months or years)
Optional: months outstanding this year (1–12); points paid by the seller (informational only).
Teaching formula
Straight-line: current-year amount = (points ÷ term in months) × months outstanding this year. Remaining unamortized = points minus that current-year amount. The purchase-year illustration, when you select it on a purchase loan, treats the full points figure as the current-year educational amount.
Assumptions
- Cash-method versus accrual, principal-residence versus rental, and “points in lieu of interest” tests are not fully modeled.
- Seller-paid points stay informational. They are not added to the educational deduction line.