Mortgage Points Calculator

Decide whether paying for discount points pays off. Enter your loan, base rate, term and how many points you would buy, then press Calculate to see your break-even month and lifetime savings.

Written by TopicDrill Editorial Team·Updated June 2026

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Cumulative cash paid

With points No points

How the mortgage points calculator works

The tool prices your points as a percentage of the loan, then lowers your rate by the reduction you enter for each point. It works out the monthly payment both with and without the buy-down and reports the gap between them as your monthly saving.

Dividing the upfront cost by that monthly saving gives the break-even month, the moment the accumulated savings finally repay what you spent on points. The chart tracks the running total of cash paid under each scenario, starting the points line higher because of the upfront fee and then watching the no-points line catch up and overtake it.

A worked example

Suppose you borrow 320,000 dollars over 30 years at 6.75 percent and buy 2 points for 6,400 dollars, each cutting the rate by a quarter point to 6.25 percent. The payment drops by roughly 105 dollars a month, so you break even in a little over five years and save thousands more if you keep the loan to term.

Things to keep in mind

The case for points lives or dies on how long you keep the loan. Sell or refinance before break-even and you lose money on the deal. Always confirm the exact rate reduction per point with your lender, since it is not standardised. The Consumer Financial Protection Bureau explains points in plain language. If you are also weighing a refinance, our mortgage payoff calculator shows what extra payments would do instead.

Frequently asked questions

What is a mortgage discount point?

A discount point is an upfront fee you pay the lender to lower your interest rate. One point costs 1 percent of the loan amount. On a 320,000 dollar loan a single point is 3,200 dollars, paid at closing in exchange for a smaller rate and a lower monthly payment.

How do I know if buying points is worth it?

Compare your break-even month to how long you plan to keep the loan. The break-even is the upfront cost divided by the monthly saving. If you will stay in the home and keep the mortgage well past that month, the points pay for themselves and then save money. If you may move or refinance sooner, skip them.

How much does one point lower my rate?

There is no fixed rule, but a quarter of a percentage point per point is a common ballpark. Lenders set their own pricing, so always ask for the exact rate reduction in writing. This calculator lets you enter the reduction per point so you can match your real quote.

Are mortgage points tax deductible?

Points paid to buy down the rate on a loan for your main home are often deductible, sometimes in the year you pay them and sometimes spread over the loan term. Rules vary by situation and country, so confirm with a tax professional before relying on a deduction.

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