Mortgage Points Calculator
Buying discount points lowers your rate but costs cash at closing. Find the exact month the savings catch up with what you paid — and whether you'll still own the loan by then.
Loan and points
How to use this calculator
1. Enter the loan amount, not the home price
Points are priced off the amount you borrow. On a $500,000 house with 20% down you're borrowing $400,000, so one point costs $4,000 — not $5,000. Put the borrowed figure in the first box.
2. Get the real buydown grid from your lender
The default here assumes each point shaves 0.25 percentage points off the rate, which is a common rule of thumb. Real rate sheets move around: some days a point buys 0.375, other days barely 0.125. A weak buydown pushes break-even out by years, so it's worth asking for the actual numbers before you decide.
3. Be honest about how long you'll keep the loan
The years-you-stay slider is the whole decision. Points only pay off if you hold the mortgage past the break-even month, and refinancing counts as ending it just as much as selling does. If you're buying in a falling-rate market, or in a house you expect to outgrow, use a shorter number.
4. Compare the ladder before you commit
The points ladder table prices every option from zero to four points side by side. Break-even barely moves across the ladder, so the question is rarely "how many points" — it's the simpler yes-or-no of whether you'll still hold the loan five or six years from now. One thing this calculator leaves out: points on a purchase loan are often deductible in the year you pay them if you itemize, which shortens the real break-even. Ask a tax professional about your own situation.
About mortgage discount points
What is a mortgage discount point?
A discount point is prepaid interest. One point costs 1% of the loan amount and buys a permanently lower rate for the life of the loan — commonly about 0.25 percentage points per point, though lenders quote their own buydown grid. Two points on a $400,000 loan cost $8,000 up front.
How is the break-even point on mortgage points calculated?
Divide the up-front cost of the points by the monthly payment savings they buy. On a $400,000 30-year loan, 2 points cost $8,000 and cut a 6.75% rate to 6.25%, dropping the payment from $2,594.39 to $2,462.87 — a saving of $131.52 a month. $8,000 divided by $131.52 is about 61 months, or just over 5 years.
When are discount points a bad deal?
Whenever you sell, refinance, or pay the loan off before the break-even month, because the up-front cost is gone and the payment savings stop. Short expected stays, a small rate cut per point, and cash that you would rather put toward the down payment or an emergency fund all argue against buying points.