Many people take on a hefty mortgage when they buy a house, but the pain is eased somewhat by the tax break that goes along with the interest payments.

You can estimate your tax savings by doing a few calculations. Citicorp, a large mortgage lender, has put together a formula that will help.To make the calculation, you need your federal income tax form and the federal income tax schedules (or the accompanying chart) that show where the 15-, 28- and 33-percent tax brackets kick in. You also need to know how much interest you paid on your mortgage last year and what your annual property taxes are. Both these figures should be on the escrow statement you get from your lender each year.

Step 1: Figure out your tax bracket, which for most home owners is a blend of the 15 percent and 28 percent tax rates.

To make the calculation, find your taxable income on your tax form. (On the 1040 it's on the back of the first page). Write down your taxable income and also the federal income tax you paid.

Then add $1,000 to your taxable income and figure out how much more you would pay in taxes. When you get the difference between the two figures, divide it by 1,000.The resulting decimal figure is your tax bracket.

For example, Janice and Sidney Horn will have a taxable income of $43,000 in 1990 and pay $7,821 in federal taxes. To figure out how much they would pay if their taxable income were $44,000, they consult the tax tables for "Married Individuals Filing Joint Returns":

They find that they are paying 15 percent on their first $32,450 of taxable income, which comes to $4,867. Income above that is taxed at 28 percent. If their income were $44,000, they would pay an additional $3,208 ($44,000 minus $32,450 equals $11,460 times .28). Their total tax would be $8,075.

That is $254 more than the $7,821 they paid on a taxable income of $43,000. Divide $254 by 1,000 and you get .254. The Horns are in the 25 percent tax bracket.

Step 2: Write down the interest you pay annually on your mortgage and divide by 12 to get your monthly interest payments. Do the same thing with your annual property taxes. Add the monthly interest payments and the monthly property tax payments. The total is your monthly tax deduction for housing.

The Horns pay $878 a month in mortgage interest and $100 a month in property taxes. Their total monthly tax deduction is $978.

Step 3: Multiply your monthly tax deduction by your tax bracket to get your monthly tax savings.

The Horns multiply $978 times .25. Their tax savings is $244 a month.

Step 4: Write down your total monthly house payment for principal, interest, property taxes and homeowner's insurance. Subtract your monthly tax savings. The result is your monthly after-tax housing cost.

The Horns' monthly mortgage payment for principal, interest, taxes and insurance is $1,025. When they subtract their $244 in tax savings, they find the cost is reduced to $781 a month.

Remember that you get this tax benefit only if you itemize on your federal income tax returns, not if you simply take the standard deduction, which in 1990 will be $5,450 for a married couple filing a joint return and $3,250 for a single person.

Families and individuals often find when they buy a house that the interest they pay on a mortgage gives them enough deductions to itemize for the first time.

If you're a new home buyer, you can figure out your tax savings with the help of a real estate agent. Agents probably will use your marginal tax rate - the taxes you paid on your last dollar of income - instead of going to the trouble of blending the rates.

Using the marginal tax rate overstates your tax savings from home ownership somewhat but still gives you a general idea. In the case of the Horns, using their marginal tax rate of 28 percent would have overstated their savings by $30 a month.

You can get a free copy of the Citicorp booklet "Keys to Confident Homebuying" by writing to Citicorp Mortgage, Public Affairs, 670 Mason Ridge Center Drive, St. Louis, Mo. 63141.



Here's a tax table showing where the 15-,

Here's a tax table showing where the 15-, 28- and 33-percent tax rates kick in on 1990 tax returns:

- For married couples filing jointly, the first $32,450 in income is taxed at 15 percent, or $4,867.50. Income above that is taxed at 28 percent. Income above $78,400 is taxed at 33 percent.

- For singles, the first $19,450 of income is taxed at 15 percent, or $2,917.50. Income above that is taxed at 28 percent. Income above $47,050 is taxed at 33 percent.

- For heads of households, the first $26,050 is taxed at 15 percent, or $3,907.50. Income above that is taxed at 28 percent. Income above $67,200 is taxed at 33 percent.