The after-tax cash flow benefit of the mortgage is $12,392.49.
To calculate the after-tax cash flow benefit of a mortgage with a 25% marginal tax bracket, we need to determine the annual interest payment and the tax savings.
The annual interest payment can be calculated by multiplying the remaining principal value by the annual interest rate (5.5%). So, the annual interest payment is $185,941.09 × 0.055 = $10226.03.
The tax savings can be calculated by multiplying the annual interest payment by the marginal tax rate (25%). So, the tax savings is $10226.03 × 0.25 = $2556.51.
Therefore, the after-tax cash flow benefit of the mortgage is the difference between the mortgage payment and the tax savings.
The monthly mortgage payment is $1,245.75.
So, the annual mortgage payment is $1245.75 × 12 = $14,949.
The after-tax cash flow benefit is $14,949 - $2556.51 = $12,392.49.