Mortgage Points Calculator — Is Buying Points Worth It?
Mortgage discount points let you pay upfront to lower your interest rate — typically 1 point costs 1% of the loan amount and reduces the rate by 0.25%. This calculator tells you how long it takes to break even on that upfront cost and how much you save over the life of the loan. It's only worth it if you plan to stay in the home past the break-even point.
How to Use This Calculator
- 1
Enter your loan amount.
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Enter the interest rate you're offered without points.
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Enter the rate with points (lower rate).
- 4
Enter the total upfront cost of the points.
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Click Calculate — if you plan to stay beyond this many months, buying points saves money.
Frequently Asked Questions
One discount point costs 1% of the loan amount and typically reduces your interest rate by 0.25% (though this varies by lender). On a $400,000 loan, 1 point costs $4,000.