✨Mortgage Points Calculator
Discount points let you pay upfront to lower your mortgage rate. This calculator shows the cost, the monthly savings, and your break-even point.
Last updated: · Reviewed by The CalcWise Team
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How to use this calculator
- Enter your loan amount and the base interest rate.
- Enter how many discount points you are considering (1 point = 1% of the loan).
- Calculate to see the upfront cost, your new rate, monthly savings, and break-even time.
How it works
Each mortgage point typically costs 1% of your loan amount and lowers your rate by roughly 0.25%. Buying points makes sense only if you keep the loan long enough for the monthly savings to recover the upfront cost.
That recovery period is the break-even point. If you plan to sell or refinance before then, points cost you money; if you will stay well beyond it, they can save a substantial amount over the life of the loan.
Example: On a $300,000 loan, buying 2 points costs $6,000 upfront, cuts the rate by about 0.5%, saves roughly $100/month, and breaks even in around 5 years.
Frequently asked questions
Are mortgage points worth it?
They pay off if you keep the loan past the break-even point. For short stays or likely refinances, they usually are not worth it.
Are discount points tax deductible?
Points on a primary home mortgage are often deductible, but rules vary — consult a tax professional about your situation.