Mortgage Points Calculator

How to use

1. 1Enter the loan amount (principal you are borrowing, not the home price), the base interest rate the lender quotes without points, and the loan term.
2. 2Enter the number of points you are considering and the rate reduction per point the lender is offering. Typical is 0.25 per point, but ask the lender for the exact number on the Loan Estimate.
3. 3Enter how many years you genuinely plan to keep this mortgage. Remember that refinancing or selling both end the buy-down, so use the shorter of the two.
4. 4Read the verdict, the break-even month, the monthly savings, the net savings at your planned exit, and the lifetime cash saved if you hold the loan to the end of the term.
5. 5Compare 0 to 3 points side by side in the scenarios table to pick the best level for your holding plan, and tap a preset to populate a common scenario quickly.

About this tool

Mortgage Points Calculator answers the single question every buyer asks when a lender sends two rate quotes on a Loan Estimate: 'is it worth paying for points?' A discount point (also called a buy-down point) is 1 percent of the loan amount paid upfront in exchange for a lower interest rate on a fixed-rate mortgage. The classic break-even decision is to divide the cost of the points by the monthly P&I savings to find how many months you need to keep the loan just to recoup that upfront cash. Anything past break-even is real savings; anything before it is a loss. This tool runs the full math, not just the napkin version, with the standard fixed-rate amortization formula: monthly P&I = P * r * (1 + r)^n / ((1 + r)^n - 1). It computes the payment without points and the payment with points, the dollar cost of the points, the new buy-down rate, the break-even point in months and years, the net cash position at your planned holding period (factoring in the upfront cost and the small differential in remaining loan balance), the interest saved during the time you actually keep the loan, and the lifetime cash savings if you keep the loan to the end of the term. A side-by-side scenarios table compares 0, 0.5, 1, 1.5, 2, and 3 points on the same loan so you can see which point level gives the best net position at your planned exit, and the most profitable option is starred automatically. Because lender pricing varies, the rate reduction per point is editable; the market rule of thumb is 0.25 percentage points off per point, but quotes commonly land at 0.125, 0.25, or 0.375 depending on the lender, the loan type, and the rate environment. An optional tax toggle accounts for the IRS rule that lets owner-occupied buyers deduct points paid on a purchase mortgage in the year paid, and surfaces both the pre-tax and after-tax break-even points so you can compare both. Six built-in presets cover the most common scenarios: a starter home with one point, a long-stay 'forever home' with two points, a job-transfer 'skip the points' case, a 15-year mortgage where points break even faster, a jumbo loan where the dollar swings get large, and a weak-buy-down scenario showing what happens when a lender only offers 0.125 per point. Useful for first-time homebuyers comparing lender quotes, refinance borrowers deciding how many points to pay, anyone trying to decide whether to use cash for a larger down payment vs a lower rate, and anyone double-checking a loan officer's verbal pitch. Every number is computed in your browser; loan amounts, interest rates, holding plans, and tax assumptions stay on your device.

Free to use. Works in your browser. No signup, no login.