Mortgage Points Calculator

Compare a mortgage quote with discount points against the same loan without them. See what the points cost, how much they lower the payment, the month they pay for themselves, and whether you come out ahead if you sell or refinance after a few years. Principal and interest only; your inputs stay in your browser.

Your loan and the two quotes

The loan

The two quotes

The interest rate (not the APR) quoted with no discount points.

One point costs 1% of the loan amount. Fractions like 0.5 are fine.

The rate your lender quotes for those points.

Until you sell, refinance or pay it off.

Break-even: month 48 (4 years) · saves $50.11/month. See full results

Example: $300,000.00 over 30 years at 7% with no points, or 6.75% for 1 point (illustrative pricing, not a lender quote). Enter your numbers to update.

Your points estimate

Break-even
Month 48 (4 years)
First month the points have paid for themselves
Cost of the points
$3,000.00
1 × 1% of $300,000.00, paid at closing
Monthly payment savings
$50.11
$1,995.91 → $1,945.79
Simple break-even
59.9 months
Points cost ÷ monthly savings
Net savings over the full term
+$15,040.75
Interest saved minus the points
Net savings if you keep it 7 years
+$2,289.33
Counts the balance owed then

The points pay for themselves in month 48 and save $2,289.33 if you keep the loan 7 years. The simple rule of thumb says 59.9 months; counting the lower balance you would owe, it is 12 months sooner.

Principal and interest only, same loan amount and term for both quotes. Taxes, insurance, PMI and other closing costs are not included.

If you sell, refinance or pay off early

Each option's cost at that point is the payments made so far plus the balance you would still owe, plus the points for the points option.

If you sell, refinance or pay off after…

AfterPoints ahead byNo points: paid + owedWith points: paid + owedNo points: balance owedWith points: balance owed
1 year −$2,248.83$320,903.46$323,152.29$296,952.57$296,802.76
2 years −$1,495.34$341,586.62$343,081.96$293,684.84$293,382.89
3 years −$739.95$362,033.56$362,773.51$290,180.89$289,724.91
4 years +$16.83$382,227.19$382,210.36$286,423.64$285,812.24
5 years +$774.43$402,149.22$401,374.79$282,394.77$281,627.13
7 years (your plan) +$2,289.33$441,098.47$438,809.14$273,442.24$272,362.42
10 years +$4,547.74$496,946.05$492,398.31$257,437.15$255,903.00
15 years +$8,190.72$581,319.95$573,129.23$222,056.60$219,886.26
20 years +$11,468.72$650,918.03$639,449.31$171,900.23$169,458.68
30 years +$15,040.75$718,526.69$703,485.94$0.00$0.00

Over the full term

No points vs. points, run to payoff

ItemNo pointsWith points
Interest rate 7%6.75%
Monthly payment (principal and interest) $1,995.91$1,945.79
Points paid at closing $0.00$3,000.00
Total interest $418,526.69$400,485.94
Interest + points $418,526.69$403,485.94

What discount points are

Discount points are an upfront fee paid at closing in exchange for a lower interest rate. One point costs 1% of the loan amount, so one point on $300,000.00 is $3,000.00. How much a point lowers the rate is not fixed: it depends on the lender and the market, so this calculator asks for the rate your lender actually quotes instead of assuming a standard reduction (CFPB: lender credits and points). Lender credits work the other way: a higher rate in exchange for lower closing costs.

Points appear in the loan costs on your Loan Estimate, so you can ask a lender for quotes with and without points and compare them here.

Two ways to measure break-even

Simple break-even
Cost of the points ÷ monthly payment savings: the rule of thumb most calculators show. In the example: $3,000.00 ÷ $50.11 = 59.9 months.
True break-even
The first month in which the points option has cost less in total, counting the payments made, the balance you would still owe if you sold or refinanced then, and the points. In the example it is month 48.

The true break-even comes sooner because a lower rate sends more of each payment to principal, so the balance you owe falls faster. With the same loan amount and term, the difference between the two options at any point is exactly the interest saved so far minus the points, so once the points break even they stay ahead.

How long you keep the loan decides it

Points only pay off if you keep the loan past the break-even point; selling or refinancing earlier means you paid for savings you did not collect (CFPB research on discount points). In the example, keeping the loan 7 years saves $2,289.33, but refinancing after 3 years leaves you $739.95 worse off. The CFPB suggests comparing the shortest, longest and most likely time you might keep the loan; the table under the results shows each checkpoint.

Not every point is worth the same

Two points that bring the rate from 7% to 6.5% cost $6,000.00, save $99.70 a month and break even in month 48. If the same two points only brought the rate to 6.85%, they would save $30.13 a month and not break even until month 160 (13 years, 4 months). Compare the actual rate each quote offers, not the number of points.

How the comparison is calculated

  1. Cost of the points = number of points × 1% of the loan amount, paid in cash at closing.
  2. Each quote's payment is the fixed-rate payment P × r × (1 + r)n ÷ ((1 + r)n − 1), where r is the annual rate ÷ 12 and n is the number of months: the same formula as our loan payment calculator.
  3. Both loans are amortized month by month. For every month, each option's cost is payments made so far + balance still owed, plus the points for the points option.
  4. The break-even month is the first month the points option costs less. The same comparison powers our mortgage refinance calculator.

Amounts are calculated at full precision and rounded to cents only for display.

What this calculator does not include

  • Other closing costs, property taxes, homeowners insurance, mortgage insurance (PMI) and escrow. These are usually the same for both quotes.
  • What the cash could earn if you did not spend it on points, and any tax treatment of points. Ask a tax professional about deductibility.
  • Financing the points into the loan, lender credits, temporary buydowns and adjustable-rate loans.
  • Rates stay fixed, with monthly payments and interest at the annual rate ÷ 12. No lender's pricing is assumed. Results are estimates, not a loan offer or financial advice.

Methodology and testing

Both quotes use the same tested amortization engine as every loan calculator on this site. Automated tests check the break-even month and the savings at each checkpoint against independent closed-form balance calculations for 300 random loans, including zero-rate and no-points cases. How we build and test calculators.

Sources

  • Mortgage Refinance Calculator

    New payment, true break-even that counts the balance owed, savings if you sell after N years, and a full-term comparison.

  • Loan Payment Calculator

    Monthly payment, total interest, term comparison, extra-payment savings and a full amortization schedule.