Mortgage Points Calculator
Determine if purchasing discount interest points is worth the upfront closing costs based on holding loan tenure.
5.2 Years to Breakeven
Breakeven holding period: 62 Months • Monthly savings: $49.05 • Upfront cost of points: $3,000
Loan Details
Scenario Side-by-Side
No Points Loan
Reduced Rate Loan
Savings by Loan Holding Duration
| Hold Time | Total Savings | Net Savings (ROI) | Status |
|---|---|---|---|
| 2 Years | $1,177 | $-1,823 (-60.8%) | No |
| 3 Years | $1,766 | $-1,234 (-41.1%) | No |
| 5 Years | $2,943 | $-57 (-1.9%) | No |
| 7 Years | $4,120 | $1,120 (37.3%) | Worth It |
| 10 Years | $5,886 | $2,886 (96.2%) | Worth It |
| 15 Years | $8,829 | $5,829 (194.3%) | Worth It |
| 30 Years | $17,659 | $14,659 (488.6%) | Worth It |
How Mortgage Points Calculator Works
When financing a property, lenders offer the option to "buy down" your mortgage interest rate by paying upfront fees known as **discount points**. This is essentially pre-paying interest to secure a lower monthly payment over the life of your mortgage. To help you decide, our tool breaks down the decision using key mortgage inputs and calculations.
Enter Loan Amount
Input the total principal of your home loan. Since discount points are calculated as a percentage of this total, the loan amount is the foundation of the calculation.
Set Current Rate
Provide the base interest rate offered by your lender without any points. This serves as the benchmark to compare your savings.
Choose Points to Buy
Select the number of discount points you are considering. Lenders usually allow purchasing fractional points (e.g., 0.5, 1, 1.5, or 2 points).
Discount Points
Each discount point costs exactly 1% of your total loan amount and typically reduces your interest rate by 0.25% (0.0025).
Break-Even Period
The time (in months) required for your cumulative monthly payment savings to fully recover the upfront cost of the points.
Monthly Savings
The difference between your monthly principal and interest payment at the base rate versus the discounted rate.
Total Savings Over Loan Life
The total net savings you will realize over the complete duration of the loan, minus the upfront cost of the points.
Frequently Asked Questions
Read through our guide below to understand points strategy, taxes, and other critical considerations.
Points Strategy
The decision to purchase mortgage points is determined by the length of time you plan to keep your loan. Check the Mortgage details to see your overall amortization.
For example, if buying 2 points on a $300,000 loan costs $6,000 upfront and reduces your monthly payment by $120, your break-even period is 50 months ($6,000 / $120), or 4 years and 2 months. If you intend to sell the home or refinance the mortgage before hitting 50 months, you will lose money on the points. Use other tools on our Finance hub to compare overall loan options.
Remember that buying points consumes cash that could otherwise be used for your down payment or kept as emergency savings. Additionally, in a high-interest rate environment where you plan to refinance within the next 2 to 3 years, buying discount points is rarely optimal because the loan will likely be replaced before reaching your break-even threshold.
Frequently Asked Questions About Mortgage Points
Is this points calculator free?
Yes. Calculate unlimited mortgage points scenarios with no registration.
When should I buy mortgage points?
Buy points if you plan to stay in the home beyond the break-even period.
Can this calculate break-even point?
Yes. See exactly when upfront cost equals monthly savings.
Do you store loan data in this calculator?
No. All calculations run locally with complete privacy.