Mortgage Points Calculator

Find out whether buying discount points is worth it — the upfront cost, the monthly savings, your break-even month, and what you'd save over the life of the loan.

Loan Amount

Base Interest Rate (%)

Points Purchased(1 point = 1% of loan)

Rate Reduction Per Point (%)

Loan Term

15 Years30 Years

Break-Even Point

61 months

Keep the loan past 5.1 years and buying points pays off. Your rate drops to 6.250%.

Points Breakdown

Upfront Cost of Points	$7,000
Rate Without Points	6.750%
Rate With Points	6.250%
Payment Without Points	$2,270.09/mo
Payment With Points	$2,155.01/mo
Monthly Savings	$115.08
Lifetime Net Savings (after cost)	$34,430

Is It Worth It?

If you keep this loan for the full 30 years, buying 2 points saves you $34,430 net. But you only come out ahead if you stay past the 61-monthbreak-even. Selling or refinancing sooner means you'd lose money on the points.

What Are Mortgage Points?

Discount points are prepaid interest you buy at closing to permanently lower your mortgage rate. One point costs 1% of your loan — so on a $350,000 loan, each point runs $3,500. In exchange, lenders typically shave roughly 0.25% off your rate per point, though the exact amount varies by lender and market.

The whole decision comes down to break-even: divide the upfront cost by your monthly savings to find how many months it takes to recoup what you paid. Stay in the loan longer than that and points are pure savings. Sell or refinance before break-even and you've lost money. That's why points make the most sense when you're confident you'll keep the mortgage for many years.

Points are one of several levers to lower your rate. Explore the others in our rate buydown guide and how to get the lowest mortgage rate, and check today's pricing in the mortgage rates guide. To see the full monthly picture, run the numbers in our mortgage calculator.

Rate Buydown Guide →Get the Lowest Rate →

Frequently Asked Questions

How much does one mortgage point cost?

One discount point equals 1% of your loan amount, paid upfront at closing. On a $350,000 loan, that's $3,500 per point. In return, lenders usually lower your rate by about 0.25% per point, though the exact reduction depends on the lender and market conditions.

When is buying points worth it?

Points pay off when you keep the loan past the break-even point — the month your accumulated monthly savings exceed what you paid upfront. If you're confident you'll stay in the home and won't refinance for many years, points can save real money.

Are mortgage points tax-deductible?

Discount points on a primary-home purchase are often deductible in the year paid if you itemize, since the IRS treats them as prepaid interest. Points on a refinance usually must be deducted gradually over the loan's life. Confirm with a tax professional.

What's the difference between discount points and origination points?

Discount points lower your interest rate — that's what this calculator models. Origination points are a fee the lender charges to process the loan and do not reduce your rate. Always check your Loan Estimate to see which is which.

Should I buy points or make a bigger down payment?

If you'll keep the loan long-term, points lower your rate and lifetime interest. A bigger down payment lowers your balance and can help you avoid PMI. If you're unsure how long you'll stay, the down payment is often the safer use of cash.