Mortgage Points Calculator
Discount points are prepaid interest: you pay a fee at closing in exchange for a lower rate. Whether that pays off depends on how long you keep the loan.
Enter your figures below. Results update as you type.
Break-even point5 yr 1 mo$3,200.00 of points saves $52.90 a month
- Payment without points
- $2,075.51
- Payment with points
- $2,022.62
- Cost of the points
- $3,200.00
- Saving over the full term, after cost
- $15,842.64
Points pay off only if you keep the loan beyond the break-even point. Selling or refinancing before 5 yr 1 mo means the points cost more than they saved.
How the Mortgage Points calculation works
Break-even months = cost of points / monthly saving
One point on a $320,000 loan costs $3,200. If it lowers the rate from 6.75% to 6.5%, the payment falls by $52.90 a month and the points pay for themselves in 5 years 1 month. Over the full 30 years the net saving is $15,843.
Frequently asked questions
How much does one mortgage point cost?
One point is 1% of the loan amount: $3,200 on a $320,000 loan. Each point typically lowers the rate by around 0.25 percentage points, though the exact trade varies by lender.
Are mortgage points worth it?
Only if you keep the loan beyond the break-even point, here about five years. If you expect to sell or refinance before then, skip the points.
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