Mortgage Points Calculator
Buying discount points lowers your rate for an upfront fee. This finds your break-even — the month the savings finally pay back the cost.
Example: with Loan amount $350,000 · Rate without points 7.0% · Discount points 2 points · Rate reduction per point 0.25 %/point → Break-even: 61 months (5.0 yrs).
- Cost of points$7,000
- Rate with points6.50%
- Monthly payment savings$116.32
Computed by the calculator below using its default values. Change any input to see your own numbers.
Compare lender rates with and without points
Learn morePoints are a break-even bet
Paying points only wins if you keep the loan past the break-even month. Sell or refinance before then and you lose money. The longer you’ll stay, the better points look; for a short hold, skip them.
How it’s calculated & sources
Cost = loan × points% (1 point = 1%). The reduced rate amortizes to a lower monthly payment; break-even = point cost ÷ monthly savings.
Benchmark: the break-even month versus how long you’ll keep the loan. One point usually buys about 0.25% off the rate.
Results update as you type and are general estimates, not personalized financial, tax, medical or legal advice. Verify with a professional.
Frequently asked questions
Are points tax-deductible?
Points on a home purchase are often deductible as mortgage interest in the year paid; on a refinance they’re usually deducted over the loan’s life. Check with a tax pro.
Is buying points the same as a bigger down payment?
No — points lower your rate; a bigger down payment lowers your balance. Compare both; sometimes more down (or just saving the cash) beats points.