Mortgage Points Calculator — Is Buying Points Worth It?
Each discount point costs 1% of the loan amount and typically lowers your rate by 0.125–0.25%. Enter your loan details and the rate with and without points to find the break-even month — the point at which the monthly saving offsets the upfront cost.
%
%
pts
years
3.8 years to recoup the upfront cost
- 1
Upfront points cost
300,000 × 1.5% ÷ 100 = 4,500One point = 1% of the loan amount, paid at closing. - 2
Payment without points
300,000 × 0.005625 × 7.5332 ÷ (7.5332 − 1) = 1,945.79 - 3
Payment with points
300,000 × 0.005208 × 6.4892 ÷ (6.4892 − 1) = 1,847.15 - 4
Monthly saving
1,945.79 − 1,847.15 = 98.64 - 5
Break-even (months)
4,500 ÷ 98.64 = 45.6
How does this calculator work?
Break-even = upfront points cost ÷ monthly payment saving. After that month you come out ahead every month. On a $300k, 30-year loan, 1.5 points at 0.5% rate reduction might cost $4,500 upfront and save ~$90/month — break-even around 50 months. Only worthwhile if you keep the loan past that point.
Formula
How this is calculated
Mortgage discount points are an upfront fee paid at closing — each point equals 1% of the loan amount — in exchange for a permanently lower interest rate. The rate reduction varies by lender; a common rule of thumb is 0.125–0.25% per point, but the actual figure is whatever the lender quotes.
This calculator computes the standard amortisation payment at both rates. The monthly saving is the difference between those two payments. The break-even point is how many months you need to stay in the loan before the accumulated monthly savings equal the upfront cost (points cost ÷ monthly saving). After the break-even you are ahead; before it you are not.
The cumulative-saving chart starts negative (you are behind by the points cost), crosses zero at the break-even, and rises steadily thereafter. If you sell or refinance before break-even, the points cost more than they save. The lifetime net saving is calculated assuming you keep the loan for its entire term — it can be substantial on a large, long-term loan if the break-even is well within the term.
Frequently asked questions
It varies by lender and market conditions — typically 0.125% to 0.25% per point, but sometimes less. Always ask your lender for the exact quote rather than assuming a fixed reduction.
In the US, discount points paid on a primary home purchase mortgage are generally deductible in the year paid (as of 2025 tax rules). Refinance points are deducted over the loan life. Tax rules change — consult a tax adviser for your specific situation.
Probably not. If you refinance or sell before the break-even, you will not recoup the upfront cost. Points make the most sense if you plan to stay in the home and keep the original mortgage for several years beyond the break-even.
Also known as
TG we-Calculate Editorial Team. (2026). Mortgage Points Calculator — Is Buying Points Worth It? [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/mortgage-points-calculator
TG we-Calculate Editorial Team. "Mortgage Points Calculator — Is Buying Points Worth It?." TG we-Calculate. 2026. https://we-calculate.com/calculator/mortgage-points-calculator.
TG we-Calculate Editorial Team, "Mortgage Points Calculator — Is Buying Points Worth It?," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/mortgage-points-calculator
@misc{wecalculate_mortgage_points_calculator, title = {Mortgage Points Calculator — Is Buying Points Worth It?}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/mortgage-points-calculator}}, year = {2026}, note = {TG we-Calculate} }
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