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Mortgage Points Calculator
Should you buy discount points to lower your mortgage rate? See the break-even timeline and total savings.
Mortgage Points Calculator
Thinking about buying points to lower your rate?
$
$50,000$2,000,000
The amount you're borrowing, not the home price
6.5%
3.0%10.0%
Your offered mortgage interest rate before buying points
7 years
1 year30 years
Points pay off over time, so the longer you stay the better
Buying points works in your favor, but the savings are modest: $1,195 over 7 years.
Here's the thing
Paying $3,200 upfront drops your rate from 6.50% to 6.25%, saving you $52 every single month. You break even in 5 years and 2 months, and everything after that is money in your pocket.
What I'd actually do
The math works, but the net savings of $1,195 over 7 years is modest. Consider whether that upfront cash would serve you better in an emergency fund or home repairs.
Cost of points
$3,200
1 point at 1% of loan each
New rate
6.25%
Down from 6.50%
Monthly savings
$52
$2,023/mo → $1,970/mo
Break-even timeline
5 years and 2 months
You plan to stay 7 years, so you come out ahead
Net savings over 7 years
$1,195
After subtracting the upfront cost of points
Total savings over full 30-year loan
$15,636
If you keep the loan for its full term without refinancing
Original monthly payment
$2,023
6.50% on a 30-year loan
New monthly payment
$1,970
6.25% on a 30-year loan
The Money Friend
Buying points works in your favor, but the savings are modest: $1,195 over 7 years.
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This calculator provides estimates for informational purposes only and does not constitute financial advice. Actual costs may vary based on your creditworthiness, location, and lender. Consult a licensed financial advisor or mortgage professional before making financial decisions.
Interest rates, payments, and loan terms shown are examples for illustration purposes only and do not represent an offer to lend, a commitment to make a loan, or a guarantee of any specific rate or term. Actual rates and terms are determined by lenders based on your individual credit profile and may differ from examples shown.
Past performance and historical data do not guarantee future results. Equal Housing Opportunity.
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