Mortgage Points Calculator
What discount points cost, how much they lower the payment, how many months they take to pay back, and where you stand after the years you keep the loan.
Result
Break-even: 61 months
Both rates fixed for the whole term and points paid in cash at closing. Selling or refinancing before the break-even means the points cost more than they saved.
- Cost of the points
- $3,000.00
- Monthly payment without points
- $1,945.79
- Monthly payment with points
- $1,896.20
- Monthly saving
- $49.59
- Net saving over the full term
- $14,852.98
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Results are arithmetic from the figures you enter, not legal, tax, lending or settlement advice. Fees vary by state, lender and negotiation, and the site quotes none of them. Check your Loan Estimate, Closing Disclosure or settlement statement for the real numbers. Read the full disclaimer
How to use the Mortgage Points Calculator
- Enter the loan amount, the rate you would pay without points, the number of points and the lower rate they buy.
- Enter the loan term, and if you can, how many years you expect to keep the loan before selling or refinancing.
- Read the months to break even and the net saving by the time you expect to leave.
The formulas
cost of points = loan amount × points ÷ 100monthly saving = payment without points − payment with pointsbreak-even (months) = cost ÷ monthly saving, rounded upEach payment is the level payment for the loan at its rate, rounded to the cent, as on the mortgage calculator. If the rate with points does not lower the payment, the points are never paid back, so the page leaves the break-even blank and says so. Buying no points has nothing to pay back, so that break-even is zero months.
Net saving by a date
Break-even compares payments only. If you leave after H months, what you have actually saved is:
(payment without × H + balance owed without) − (payment with × H + balance owed with) − cost of pointsThe balance owed with points is lower, because more of each payment went to principal. Over the full term the balances are zero and the figure is the difference in total paid, less the points.
What is not included
Tax treatment of points, lender credits (the reverse of points, where a higher rate lowers your closing costs), and the chance that you refinance because rates fall, which cuts the time you keep the loan.
With your numbers
- Cost = $300,000.00 × 1% = $3,000.00
- Monthly saving = $1,945.79 − $1,896.20 = $49.59
- Break-even = $3,000.00 ÷ $49.59 = 61 months, rounded up
Quick reference
Both rates fixed for the whole term and points paid in cash at closing. Selling or refinancing before the break-even means the points cost more than they saved.
| Example | Break-even |
|---|---|
| 1 point for 6.75% to 6.5% on 300,000 | 61 |
| The same, kept 3 years | 61 |
| 0.375 points on 180,000 | 47 |
| 2 points on a 15-year 400,000 loan | 73 |
| Points that do not lower the rate | |
| 1.5 points on 250,000 over 25 years | 68 |
Common questions about the Mortgage Points Calculator
- How much does a point cost?
- One point is 1% of the loan amount, paid at closing. On 300,000 one point is 3,000. Points need not be whole: a quarter point on the same loan is 750.
- How is the break-even worked out?
- The cost of the points divided by the monthly payment saving, rounded up to a whole month. On 300,000 over 30 years, one point that lowers the rate from 6.75% to 6.5% saves 49.59 a month, so the 3,000 is repaid in 61 months, just over five years.
- Why does the net saving at my horizon differ from the saving times the months?
- Because a lower rate also repays principal faster, so the balance you would owe on leaving is lower too. The net saving adds that difference to the payments saved and takes off the cost of the points. It is the money you are ahead, or behind, on the day you sell or refinance.
- Are points worth it?
- That depends on how long you keep the loan, which only you can judge. The CFPB suggests comparing the cost over the shortest, the most likely and the longest time you might keep it. Try each in the years field. The APR calculator shows how the points change the loan’s APR.