Mortgage discount points let you pay an upfront fee at closing to lower your interest rate for the life of the loan. Each point costs 1% of the loan amount and typically reduces the rate by 0.25%. This calculator tells you exactly how much points cost, how much you save each month, and how long it takes to break even — so you can decide whether buying points is the right move for your situation.
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Typically 0.25% — check with your lender
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Calculate Points Value
How to Use the Mortgage Points Calculator
Buying mortgage discount points is one of the most common decisions homebuyers face at closing. Each point costs 1% of the loan amount and reduces your interest rate — but whether it actually saves you money depends on how long you keep the loan. This mortgage points calculator does the math for you instantly.
Step 1: Enter Your Loan Amount
Start with the total loan amount you are borrowing (the home price minus your down payment). This is the figure your lender uses to calculate the cost of points. For example, on a $300,000 loan, one point costs $3,000.
Step 2: Enter Your Base Interest Rate
Input the interest rate your lender is offering without buying any points. This is your baseline rate. The calculator will compare payments at this rate against the reduced rate after purchasing points, so accuracy here is important — use the exact rate from your Loan Estimate document.
Step 3: Set the Rate Reduction and Points
The rate reduction per point is typically 0.25%, meaning each point you buy lowers the rate by a quarter of a percent. Some lenders offer more or less — ask your lender for the exact figure. Then select how many points you are considering: half a point, one, one and a half, two, or three. More points means a bigger upfront cost but a lower rate.
Step 4: Choose Your Loan Term
Select 15 or 30 years. The loan term affects both your monthly payment and total interest paid. On a 30-year loan, you have more months to benefit from the lower rate, which often makes points more attractive. On a 15-year loan, the monthly savings are smaller but you already pay much less interest overall.
Step 5: Review the Results
The calculator shows your cost of points, monthly savings, break-even period, total interest saved, and net savings (interest saved minus the cost of points). The break-even period tells you the most important number: how many months until the points pay for themselves. If you plan to stay in the home longer than the break-even period, buying mortgage discount points is likely a smart financial decision. If you might sell or refinance sooner, you are better off keeping the cash.
FAQ
Is this mortgage points calculator free?
Yes, this mortgage points calculator is completely free with no signup, no account, and no hidden fees. All calculations run locally in your browser — your financial details are never sent to any server or stored anywhere.
Is my financial data private when using this tool?
Absolutely. All calculations happen entirely in your browser using JavaScript. No data is ever transmitted to a server, stored in a database, or shared with third parties. You can even disconnect from the internet and the tool will continue to work.
What are mortgage discount points?
Mortgage discount points are upfront fees you pay to your lender at closing to reduce your interest rate. Each point costs 1% of the loan amount and typically reduces the rate by 0.25%, though this varies by lender. For example, on a $300,000 loan, one point costs $3,000.
How many points should I buy?
The right number of points depends on how long you plan to stay in your home. Buying more points lowers your rate further but costs more upfront. Use this calculator to compare scenarios — if your break-even period is shorter than your planned stay, buying points makes financial sense.
What is the break-even period for mortgage points?
The break-even period is the number of months it takes for your monthly savings to fully recover the upfront cost of buying points. For example, if points cost $6,000 and save you $150 per month, your break-even is 40 months. After that, every month is pure savings.
Are mortgage points tax deductible?
Mortgage points paid on a purchase loan are generally tax deductible in the year you pay them. Points on a refinance are typically deducted over the life of the loan. Consult a tax professional for your specific situation, as tax laws change and individual circumstances vary.
Is buying points worth it on a 15-year vs 30-year mortgage?
Points can be worth it on either term, but the break-even calculation differs. On a 30-year loan, you have more time to recoup the upfront cost, so the break-even period is less of a concern. On a 15-year loan, the monthly savings may be smaller but total interest saved can still be substantial.