Mortgage points calculator
Discount points trade cash now for a lower rate for as long as you keep the loan. Find the break-even and the number of points that actually pays for you.
Point options at a glance
| Points | Cost | Rate | Payment | Break-even | Net at 9y |
|---|---|---|---|---|---|
| 0 | $0 | 6.750% | $2,335 | — | $0 |
| 0.5 | $1,800 | 6.625% | $2,305 | 5 yr 1 mo | $1,422 |
| 1 | $3,600 | 6.500% | $2,275 | 5 yr 1 mo | $2,827 |
| 1.5 | $5,400 | 6.375% | $2,246 | 5 yr 1 mo | $4,214 |
| 2 | $7,200 | 6.250% | $2,217 | 5 yr 1 mo | $5,584 |
| 3 ✓ | $10,800 | 6.000% | $2,158 | 5 yr 2 mo | $8,270 |
Paid over the 9 years you keep it
- Rate
- 6.500%from 6.750%
- Monthly saving
- $60
- If kept the full 30 years
- $17,823
How discount points work
A point is prepaid interest: you pay 1% of the loan at closing and the lender lowers your rate for the life of the loan. Your break-even is the point cost divided by the monthly saving. The highlighted row in the table is the option that leaves you best off at the horizon you entered.
Points are one way to spend cash at closing. Putting the same money toward a larger down payment, or toward avoiding PMI, sometimes beats them. And if you expect rates to fall and plan to refinance, points you buy today are wasted when you do. On a refinance, points count toward closing costs in the break-even calculator.