Financial Tools

Mortgage Points Calculator

Discount points are prepaid interest. The only question that decides them is how long you keep the loan, so this shows the break-even month and what the points are worth over the years you actually expect to stay.

Loan Amount

Term

Rate Without Points (percent, from your Loan Estimate)

Rate With Points (percent, from the same Loan Estimate)

Points (one point is one percent of the loan)

How Long You Expect to Keep the Loan (months, until you sell or refinance)

Values shown are examples, not an offer. Lenders price points differently, take both rates from the same Loan Estimate so the comparison is real.

See your full report

Are the Points Worth It

Verdict	n/a
Break-Even	n/a
Cost at Closing	$0
Monthly Saving	$0

Payment Without Points	$0
Payment With Points	$0
Rate Bought Down By	n/a
Position Over Your Horizon	n/a
Interest Saved Over the Full Term	$0

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For illustration only, not financial advice. Results are estimates based on the numbers you enter and do not constitute an offer, rate quote or approval.

How this is worked out

A point is one percent of the loan, paid at closing to buy the rate down. The cost is fixed, the saving is the difference between the two monthly payments, so the break-even is simply cost divided by monthly saving.

The position over your horizon is measured more carefully than that. It counts the interest actually paid inside the months you keep the loan, plus the difference in balance you would still owe at the end, minus the cost of the points. A lower rate pays down principal slightly faster, and ignoring that understates the points.

No lender publishes a fixed points-to-rate ratio, so both rates are yours to enter, ideally from the same Loan Estimate.

Consumer Financial Protection Bureau, understanding discount points

Questions people ask

How long does it take for points to pay off?

On typical pricing, five to seven years. If you expect to sell or refinance before the break-even month shown above, the points cost you money.

Are discount points tax deductible?

Points on a purchase of a main home are generally deductible in the year paid, and on a refinance they are usually spread over the life of the loan. Whether it helps depends on whether you itemise.

Is a lender credit just points in reverse?

Yes. You take a higher rate and the lender pays some of your closing costs. The same break-even logic applies, with the signs flipped.

Should I put the money into a bigger down payment instead?

Often, especially if it takes you to 20% and removes mortgage insurance. Compare the monthly saving from points against what removing PMI saves you.

Do points make sense if rates might fall?

Less so. Points are only recovered by keeping the loan, and a refinance ends that clock early. The shorter you think you will hold the rate, the worse points look.

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