Mortgage Points Calculator — Should You Buy Points?

Loan Amount ($)Enter a valid loan amount.

Interest Rate Without Points (%)Enter a valid rate.

Loan Term (years)Enter a valid term.

Points to Purchase

Rate Reduction per Point (%)

Break-Even Period

—

Cost of Points

—

Monthly Savings

—

How to Use This Tool

Enter your loan amount, base interest rate, and term.
Enter how many points you're considering, and the rate reduction per point your lender is offering.
Click Calculate for the cost, monthly savings, and break-even period.

What Are Mortgage Points?

Mortgage (discount) points let you pay an upfront fee to lower your interest rate. One point typically costs 1% of your loan amount and commonly reduces your rate by about 0.25%, though the exact reduction varies by lender.

The Break-Even Calculation

Break-Even (months) = Cost of Points ÷ Monthly Payment Savings

If you plan to keep the loan (without refinancing or selling) longer than the break-even period, buying points saves you money overall. If you might move or refinance sooner, points likely aren't worth the upfront cost.

Who Points Make Sense For

Buyers planning to stay in the home long-term (well beyond the break-even period)
Those with enough cash to pay points without stretching their down payment or emergency fund thin

Who Should Skip Points

Buyers who may sell or refinance within a few years
Those who'd rather keep cash liquid for other purposes

Frequently Asked Questions

How much does one mortgage point typically cost?

One point typically costs 1% of your total loan amount — for example, one point on a $300,000 loan would cost $3,000.

Is the rate reduction per point always 0.25%?

No, this varies by lender and market conditions — 0.25% is a commonly cited average, but always confirm the specific reduction your lender is offering for the points you're considering.

This calculator is provided for general informational and estimation purposes only. Results should not be treated as professional financial, tax, legal, medical, or engineering advice. Always verify critical calculations with a qualified professional or official source before making decisions.