FREE HOME DECISION TOOL

Mortgage Points Break-Even Calculator

Compare the upfront cost of mortgage discount points with estimated monthly payment savings and calculate an approximate break-even period.

Free to useGuided field explanationsYour inputs stay on your device

YOUR NUMBERS

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Home priceThe agreed or estimated property price before financing costs.

Why it matters

A higher price increases the loan, down payment, taxes, closing costs, and many reserves.

Down paymentThe share of the price you pay upfront instead of borrowing.

Why it matters

More down usually lowers the loan and monthly payment, but uses more cash at closing.

Loan termThe number of years used to repay the new loan.

years

Why it matters

A longer term usually lowers the monthly payment but can increase total interest.

Rate without pointsThe quoted interest rate when you do not pay discount points.

Why it matters

This is the baseline payment used to measure whether the lower-rate option earns back its upfront cost.

Rate with pointsThe quoted rate after paying the entered discount points.

Why it matters

The difference from the base rate creates monthly savings; confirm both quotes have the same loan terms.

Discount points chargedUpfront interest equal to a percentage of the loan amount; one point is 1% of the loan.

% of loan

Why it matters

Loan size times points creates the upfront cost, which must be recovered through monthly savings.

Other lender fees without pointsOther lender-controlled fees on the quote without points.

Why it matters

Points should be compared using the complete upfront cost difference, not in isolation.

Other lender fees with pointsOther lender-controlled fees on the quote with points.

Why it matters

Differences in fees or credits change the true break-even point.

Years you expect to keep the loanHow long you expect to keep this exact loan before selling or refinancing.

years

Why it matters

If you exit before break-even, the upfront points may cost more than they save.

Alternative annual return on upfront cashAnnual return the extra upfront cash could earn elsewhere.

Why it matters

Points should clear both their cash break-even and the opportunity cost of committing more cash at closing.

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CALCULATOR GUIDE

How to use the mortgage points break-even calculator

Use this calculator to test whether paying an upfront amount for a lower rate could recover its cost within the period you expect to keep the loan. It compares the entered loan and rate options rather than predicting future rates.

Key assumptions and limitations

The lower rate is available for the entered point cost and otherwise comparable loan terms.
Break-even uses modeled payment savings and does not include the time value of money or tax treatment.
Selling, refinancing, or paying off the loan before break-even can reduce the value of points.

Common questions

What does one mortgage point cost?

A point commonly equals one percent of the loan amount, but pricing and rate reductions vary by lender and market.

When can points make sense?

They may be worth evaluating when the monthly savings can recover the upfront cost before you expect to replace or repay the loan.

Educational estimates only. Verify important home, lending, insurance, tax, and legal decisions with the appropriate qualified professionals.

Mortgage Points Break-Even Calculator

Tell us what you know today.

How to use the mortgage points break-even calculator

Key assumptions and limitations

Common questions

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