Q. We're looking at two condos. One costs $1.15 million with a down payment of 10% and a fixed interest rate of 8.375%. The second costs $812,000 with 10% down and a fixed rate of 6.375%. Would we save enough on our income taxes to offset the higher cost of the more expensive condo? Our annual income is $300,000.

A. No. You'll get a bigger deduction on your federal income taxes, but that savings isn't nearly enough to cover the significantly higher mortgage payments you'll be making.

We ran some numbers, figuring that you are in the 33% tax bracket, which is the published Internal Revenue Service rate for a $300,000 income.

The interest you would pay on either property would be deducted from your gross taxable income, and that would lower the amount on which your tax is figured.

We found your federal tax bill would be $14,000 a year less with the $1.15-million condo.

But because you're borrowing more, and paying a higher interest rate, your monthly payments on a traditional, 30-year loan (and we're just talking principal and interest here) would be $42,000 a year more.

That means it would cost an additional $28,000 a year to live in the more expensive condo, even after the mortgage deduction is taken into account.

Whether you're buying a home or refinancing an existing mortgage, we have a mortgage calculator that can help you make the right decisions.