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Real Estate
Mortgage Points Calculator
See the cost of points, the monthly savings and your break-even.
Break-even
—
To recoup the points.
| Cost of points | — |
|---|---|
| Monthly savings | — |
| Payment after | — |
| — |
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Enter your figures above to see the step-by-step working.
Educational estimate — not a loan offerEverything computed client-side — nothing leaves this page
How the Mortgage Points Calculator Works
Discount points are prepaid interest that buy down your rate. One point costs 1% of the loan and typically lowers the rate by about 0.25%. To see if points pay off, compare the up-front cost with the monthly payment savings: divide the cost by the savings to get the break-even in months. Two points on a $300,000 loan cost $6,000 and, if they cut the rate from 7% to 6.5%, save about $100 a month — a break-even near 60 months.
If you’ll keep the loan longer than the break-even, points save money; if you might sell or refinance sooner, they don’t. Points are also usually tax-deductible as mortgage interest.
break-even months = cost of points ÷ monthly payment savings
Frequently Asked Questions
What is a mortgage point?
A discount point is 1% of the loan paid up front to lower your interest rate, usually by around a quarter percent per point.
Are points worth it?
Only if you keep the loan past the break-even point — the cost divided by the monthly savings. Sell or refinance sooner and you lose money.
Are mortgage points tax-deductible?
Discount points are generally deductible as prepaid mortgage interest, sometimes all at once for a purchase. Check current tax rules.
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