Mortgage Points Calculator
Buying discount points lowers your rate but costs cash at closing. This finds the exact month the smaller payment repays that cash — your break-even — so you can tell whether points are a smart buy or a waste.
Open the points calculator →Free and instant. Enter the two rates and the cost, see the break-even month.
How points work
One point equals 1% of the loan amount, paid upfront to permanently reduce your interest rate (often by roughly 0.25% per point, though it varies by lender). You're trading cash today for a lower payment every month. Whether that trade pays off depends entirely on how long you keep the loan:
Break-even (months) = Cost of points ÷ Monthly payment savings
Past the break-even month, the points are pure savings. Before it, you'd have been better off keeping the cash. The calculator also totals the lifetime interest saved, net of the points' cost.
| Loan — $320,000, 30-year term | |
| Rate with no points | 6.75% |
| Rate with 2 points | 6.25% |
| Cost of 2 points (2% of loan) | $6,400 |
| Monthly payment savings | $105 |
| Break-even | 61 months (~5.1 yr) |
Staying in this loan longer than about five years makes the points pay off; planning to move or refinance sooner means you'd likely lose money on them.
Common questions
What is a mortgage discount point?
A fee equal to 1% of the loan, paid upfront to permanently lower your rate. On a $320,000 loan, one point is $3,200. Points may be tax-deductible — ask a tax professional.
Are points worth buying?
Only if you keep the loan past the break-even month. Long-term owners benefit; if you might sell or refinance sooner, keep the cash.
How is the break-even calculated?
Cost of points ÷ monthly payment savings. $6,400 of points saving $105/month breaks even in about 61 months.