Mortgage Points Calculator

Your details

The amount you are borrowing. Points are charged as a percent of this.
years
%
One point equals 1% of the loan amount.
points
Use the rate cut if you only know the rule of thumb, or enter the lender quoted rate directly.
How much the rate drops in exchange for the points above. About 0.25% per point is a common estimate.
%
Currency
Break-even timeMedium payback
61months

Months until monthly savings repay the upfront cost.

Cost of points$3,000
Total upfront cost$3,000
Monthly payment saved$49.05
Rate with points6.25%
Interest saved over the loan$17,659
Net saving over the loan$14,659
Lifetime interest saved$17,659
Upfront cost$3,000

You break even in about 5 yr 1 mo, then save 49.05 a month.

  • The upfront cost is 3,000 to drop your rate by 0.25 percentage points.
  • Buying points pays off only if you keep the loan past the break-even point; sell or refinance sooner and you lose money.
  • Hold the loan to term and you net about 14,659 after paying for the points.
  • Discount points on a primary or second home are often tax-deductible as mortgage interest; check current IRS rules.

Next stepCompare this break-even against how long you realistically expect to stay in the home before selling or refinancing.

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