Mortgage Points Calculator
Is buying discount points worth it? Break-even period and net savings.
Your Mortgage Points Calculator Result
Generated from the inputs below — a record you can revisit, or share with anyone helping you plan.
Your detailsInput Parameters
Example rate, not current market data. Enter the rate on your loan or quote.
Each point costs 1% of the loan amount, upfront
Typical lenders offer roughly 0.125%-0.375% per point
Sale, refinance, or full payoff — whichever comes first
You'd hold the loan 7 years, past the 60.8-month break-even — points save you money net.
Analysis
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Overview
The Mortgage Points Calculator answers the classic "should I buy points?" question with real numbers instead of a rule of thumb. Discount points are prepaid interest — each point costs 1% of your loan amount upfront in exchange for a lower rate for the life of the loan.
Enter your loan amount, the rate you'd get without points, how many points you're considering, the rate reduction each point buys, and how long you actually expect to keep this loan. The calculator computes your break-even period in months, then tells you whether buying points wins or loses over your specific holding period — not just whether the monthly payment goes down.
The most common mistake with points is looking only at the lower monthly payment. If you sell or refinance before the break-even point, buying points cost you money even though your payment was lower every month you held the loan.
How the Calculation Works
Discounted Rate = Base Rate - (Points x Rate Reduction per Point)
Break-Even (months) = Point Cost / Monthly Payment Savings
The calculator runs a standard amortized monthly payment at your base rate and again at your discounted rate, using the same amortization formula as the site's other mortgage tools. The difference is your monthly savings from buying points. Dividing the upfront point cost by that monthly savings gives the break-even point in months.
The verdict then compares your break-even period against how long you actually plan to keep the loan — if you'll hold it past break-even, points save you money net; if not, you come out behind even though the payment was lower.
Frequently Asked Questions
One point equals 1% of your loan amount. On a $400,000 loan, one point costs $4,000.
It varies by lender and market conditions, but 0.125% to 0.375% per point is typical — this calculator lets you set your own lender-quoted figure.
You'd lose money on the points — you paid for a rate reduction you didn't hold long enough to fully benefit from. This is exactly why the "years you plan to keep this loan" input matters more than the sticker price of the points.
Points paid on a primary residence purchase are often deductible in the year paid, subject to IRS rules — this calculator does not model tax treatment. Consult a tax professional for your specific situation.