Mortgage Points Calculator
Decide whether paying discount points to lower your rate is worth the upfront cost — and how long until it pays off.
Free to use No sign-up needed Updates as you type
Default interest rate: 7.18% — Freddie Mac 30-year fixed average, week of Nov 5, 2026. Enter the rate from your own Loan Estimate.
How the mortgage points calculator works
Discount points let you pay the lender extra at closing in exchange for a lower interest rate, effectively prepaying interest to cut your monthly payment. This calculator prices that trade. One point costs one percent of the loan amount and typically lowers the rate by roughly a quarter of a percentage point, though the exact reduction varies by lender.
It computes the upfront cost, the smaller monthly payment, and the break-even point where cumulative savings repay what you spent. Past that month you come out ahead, so the math turns entirely on how long you keep the loan.
Worked example: with loan amount of $300,000, loan term (years) of 30 and rate without points of 7.18%, the mortgage points calculator shows break-even on points of 60 months.
- Cost of points
- $6,000
- New rate
- 6.68%
- Monthly saving
- $100.45
- Lifetime net saving
- $30,162
The formula
Point cost equals the loan amount times the number of points times one percent. The reduced rate produces a lower amortized payment; break-even months equal point cost divided by the monthly payment savings. Lifetime net saving subtracts the upfront cost from total interest avoided over the holding period.
How every calculator here computes, what it assumes and how the defaults stay current: our methodology.
- Each point is assumed to lower the rate by a fixed amount; actual reductions differ between lenders and loan types.
- Points are paid in cash at closing rather than financed, which would erode part of the benefit.
- The break-even assumes you hold the loan to that month without selling or refinancing early.
- Tax deductibility of points is not modeled and depends on your individual circumstances.
- The cash spent on points is treated as having no alternative investment return.
Reference data
Current figures behind this tool: Fannie Mae LLPA Matrix 2026.
Results are estimates for educational purposes and are not financial advice. Confirm exact figures with your lender or a licensed advisor.
Questions about the mortgage points calculator
When does buying points actually make financial sense?
Points pay off when you keep the loan well past the break-even month, which favors borrowers settling into a long-term home. If you might sell or refinance within a few years, you likely will not recover the upfront cost. Long holding periods and high loan balances tilt the decision toward buying points.
What is the difference between discount points and origination points?
Discount points buy down your interest rate and are optional. Origination points are a fee the lender charges to process the loan and do not lower your rate. This calculator models discount points only.
When comparing offers, separate the two, because a quote heavy in origination points provides no rate benefit for the cost.
Can I negotiate or deduct the cost of points?
Points are often negotiable, and sellers can sometimes pay them as a concession, which changes your break-even entirely. On a primary residence, discount points may be tax-deductible as prepaid interest, though rules vary and some must be amortized over the loan term. Confirm deductibility with a tax professional before counting it as savings.
Is my information saved or shared?
No. Every calculation runs entirely in your browser. We never store, transmit or sell the numbers you enter.
What is a mortgage point?
A mortgage (discount) point is an upfront fee equal to 1% of your loan amount that buys down your interest rate — usually by about 0.25% per point.
Whether it pays off depends on how long you keep the loan; the break-even is shown above.
Sources
- CFPB — Discount points and lender credits
- CFPB — Interest rate vs APR
- Fannie Mae — Loan-Level Price Adjustment Matrix
How the figures on this site are calculated and tested: methodology · editorial policy.
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