Mortgage Points Calculator
Calculate if buying mortgage discount points is worth it
About this calculator
A mortgage points calculator helps you determine whether purchasing discount points at closing will save you money over the life of your loan. By comparing your upfront costs against long-term interest savings, this tool calculates your break-even point and total savings potential. This analysis is crucial for making informed decisions about whether paying points aligns with your financial goals and how long you plan to stay in your home.
How to use
Enter your loan amount, current interest rate, and the cost of discount points you're considering. Input how long you plan to keep the mortgage. The calculator will show your monthly payment reduction, break-even timeline, and total savings over the loan term to help you decide if buying points makes financial sense.
Frequently asked questions
What are mortgage discount points?
Discount points are upfront fees paid to lenders to reduce your interest rate. Each point typically costs 1% of your loan amount and reduces your rate by 0.25%.
When should I buy mortgage points?
Consider buying points if you plan to stay in your home longer than the break-even period and have extra cash available at closing.
How much do mortgage points typically cost?
One discount point usually costs 1% of your total loan amount. For a $300,000 mortgage, one point would cost $3,000.