I don’t know of any online calculator, there are many subtleties.
General formula:
– Take standard deduction for your status (in 2008, $10900 if married filing jointly, $5450 if single)
– Subtract your state tax (http://www.ftb.ca.gov/individuals/tax_table/index.asp)
– Subtract your property tax
– If the resulting figure is greater than zero, subtract it from interest paid
– Multiply by your tax bracket. If your friends are thinking of buying and they are not making six figures, they are probably in the 25% bracket.
That will give you the approximate amount. They will save less if all deductions push their taxable income out of the 25% bracket (below $65,100), more if they have other itemized deductions.
