Mortgage Points Calculator
See if paying points to lower your rate makes sense
Break-even shows how long you must keep the loan for points to pay off.
How to Use This Mortgage Points Calculator
- Enter the Loan Amount (your mortgage principal)
- Enter the Loan Term in years (typically 15, 20, or 30 years)
- Enter the Interest Rate with No Points (base rate offered by lender)
- Enter the Interest Rate with Points (reduced rate after buying points)
- Enter the number of Points Paid (each point = 1% of loan amount typically)
- Enter the Cost Per Point (%) (typically 1% per point)
- Click Calculate — see your monthly savings, cost of points, and break-even period
How Mortgage Points Work (Formula)
Monthly Payment = P × r × (1+r)^n / ((1+r)^n — 1)
Cost of Points = Loan Amount × (Points × Point Cost ÷ 100)
Monthly Savings = Payment (No Points) — Payment (With Points)
Break-Even (months) = Cost of Points ÷ Monthly Savings
Real Example
Inputs:
- Loan Amount: $300,000
- Loan Term: 30 years
- Interest Rate (No Points): 7.0%
- Interest Rate (With Points): 6.5%
- Points Paid: 1 point
- Cost Per Point: 1% (standard)
Results:
- Cost of Points: $3,000
- Monthly Payment (No Points): $1,995
- Monthly Payment (With Points): $1,896
- Monthly Savings: $99/month
- Break-Even: 30 months (2.5 years)
Why Use This Mortgage Points Calculator?
- ✅ Compare Scenarios — See exact difference between paying points vs not
- ✅ Break-Even Analysis — Know exactly how many months to recover points cost
- ✅ Monthly Savings Calculation — See your reduced payment amount
- ✅ Free & Unlimited — No signup required
- ✅ Mobile Friendly — Responsive design for phones, tablets, and desktops
Frequently Asked Questions
What are mortgage points?
Mortgage points (discount points) are upfront fees paid to your lender at closing in exchange for a lower interest rate. 1 point = 1% of your loan amount and typically reduces your rate by 0.25% (varies by lender).
Is buying mortgage points worth it?
Buying points makes sense if you plan to stay in the home past the break-even point. If you sell or refinance before break-even, you lose money. Use this calculator to compare.
What is a typical break-even period?
Break-even periods vary: 2-5 years is common. If you plan to stay 10+ years, buying points usually saves money. If you might move in 3 years, skip points.
How much do points reduce interest rate?
Each point typically lowers your rate by 0.25% (25 basis points). Example: 7% → 6.75% with 1 point. Always check with your lender for exact reduction.
Can points be tax deductible?
Yes — points paid on a primary residence mortgage may be tax deductible in the year you pay them. Consult a tax professional for specific advice.
Related Mortgage Calculators
- Mortgage Payment Estimator — Calculate full PITI payment
- Mortgage Refinance Calculator — Should you refinance?
- Home Affordability Calculator — How much house can you afford?
- LTV Calculator — Loan-to-value ratio
Disclaimer: This mortgage points calculator provides estimates for informational purposes only. Actual rate reductions, point costs, and break-even periods vary by lender, loan type, and market conditions. Consult a mortgage professional before making decisions about buying points.