Mortgage Points Calculator
Compare payments with and without discount points, find your exact break-even date, model APR impact, and download a full PDF report.
Points are prepaid interest paid at closing to permanently lower your rate.
Actual rate reduction varies by lender and market conditions.
| Year | Total Paid | Principal | Interest | Balance |
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| Year | Total Paid | Principal | Interest | Balance |
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APR estimate is for comparison only. Actual APR varies by lender fees and loan features.
How to Use the Mortgage Points Calculator
In under a minute you’ll know whether buying points makes financial sense for your specific loan — with the break-even month, lifetime savings, and a side-by-side amortization you can download and bring to your lender.
Enter Your Loan Details
Input your loan amount, term in years, and the note rate your lender is quoting before any buydown. These three fields establish the baseline payment — the amount you’d pay with zero points purchased.
Set Points & Rate Reduction
Enter how many discount points you’re considering and your lender’s rate reduction per point (ask them directly — it varies). The calculator will compute the exact buydown rate, points cost in dollars, and new monthly payment instantly.
Read the Break-Even & APR
The hero card shows your monthly savings and the exact break-even date — the moment the cumulative savings equal what you paid upfront. The APR estimate shows the true annualised cost of your loan including points, so you can compare competing offers on equal footing.
Compare Schedules & Download
Expand either amortization accordion to compare yearly principal, interest, and balance under both scenarios side by side. Download the 3-page PDF report to bring to your lender or mortgage broker to negotiate your final rate and points structure.
What This Calculator Shows You
This isn’t a simple rate-minus-reduction shortcut. It runs full amortization math on both the original and buydown scenarios — including an APR estimate using binary-search precision — so every figure is accurate to the cent.
Monthly Savings & Break-Even Date
The exact dollar difference between your original and buydown monthly payments, plus the precise month and year when cumulative savings fully recoup the upfront points cost — shown in years and months.
Estimated APR with Points
A precise APR estimate that folds the points cost into the annualised rate — exactly as lenders are required to disclose. Use this to compare two loan offers where one has a lower rate but higher points.
Side-by-Side Payment Table
Original payment vs. new payment with points — displayed alongside points cost, new rate, break-even, and total interest saved in a clean key-results grid. Every number updates instantly when you adjust any input.
Loan Balance Charts
An interactive line chart showing both loan balance trajectories — without points (orange) and with points (blue) — plotted year by year, plus a donut chart comparing total interest paid under each scenario.
Dual Amortization Tables
Two expandable year-by-year amortization schedules — one for each scenario — showing total paid, principal, interest, and remaining balance per year. The “with points” table uses a green header to make comparison effortless.
3-Page PDF Report
A lender-ready PDF with a green hero savings summary, loan & buydown details, payment comparison with proportion bars, 6 summary cards, and two full amortization schedules — one per page. Ready to email or print.
What Discount Points Really Cost — and Save
Three Borrower Profiles Where Points Pay Off
Discount points are not right for every borrower — but for the right profile they can be one of the most efficient uses of closing-cost dollars. See which scenario sounds like yours.
You’re buying your forever home — or at least planning to stay for 10+ years. The break-even window of 5–7 years is easily cleared, and every year beyond that is pure interest savings compounding in your favour. On a $400,000 loan at 7%, even 1 point can save over $20,000 lifetime.
- Calculate break-even and compare to your expected stay duration before deciding
- Ask lender for pricing on 0.5, 1, and 2 points — the best value often isn’t 1 point exactly
- Check whether points are tax-deductible in your situation — consult a tax professional
In a 6.5–8% rate environment, even a 0.25% reduction via points translates to meaningful monthly savings on a large loan. You’re focused on reducing your payment as much as possible now, and you’re confident you won’t refinance for at least several years — making the upfront cost of points worthwhile.
- Run the APR comparison — if the buydown APR beats competing loan APRs, points win
- Consider whether a larger down payment to eliminate PMI might outperform buying points
- Model 0.5 points as a lower-cost option if full-point upfront is a cash stretch
You’re approaching or in retirement and want the lowest possible fixed monthly payment to preserve cash flow. Buying points at origination or refinance permanently reduces the payment floor — no dependency on rate movements or refinancing windows. The certainty of a known, lower payment often matters more than the break-even math.
- Focus on payment reduction per dollar of points, not just break-even date
- Verify you have sufficient cash reserves after paying points at closing
- Use the PDF report to share scenarios with a financial planner for holistic retirement modelling
7 Things to Know Before Buying Discount Points
Most borrowers are handed a points quote without a clear explanation of the trade-offs. These tips will help you ask the right questions and avoid costly mistakes.
Always Ask for Your Lender’s Specific Rate Reduction Per Point
The 0.125%–0.25% range is a guideline, not a standard. Some lenders offer 0.20% reduction per point, others 0.125%, and some price fractional points differently. Get the exact figure in writing before running any calculator — including this one.
The Break-Even Date Is the Only Honest Decision Metric
Ignore slogans about points “always saving money.” They only save money if you stay past the break-even date. If you sell or refinance before that month, you’ve paid more than you saved. Know your break-even — the calculator shows it to the month.
Compare APRs, Not Just Rates, Across Loan Offers
When a lender quotes a lower rate with points, the APR captures both the rate and the points cost in one number. A 6.25% rate with 2 points may have a higher APR than a 6.5% rate with no points. Always compare APRs when choosing between loan offers.
Eliminating PMI Often Beats Buying Points
If you’re putting less than 20% down and paying private mortgage insurance, redirecting points money into your down payment to hit 20% will almost always deliver a better return. PMI elimination is typically worth $100–$200/month — far more than a 0.25% rate reduction.
Fractional Points Are Often Available and Worth Modelling
You don’t have to buy exactly 1 or 2 whole points. Most lenders allow 0.5 or even 0.25 point increments. Try 0.5 points in the calculator — the cost drops dramatically while still capturing meaningful rate reduction. The optimal amount isn’t always a round number.
Don’t Confuse Discount Points with Origination Fees
On your Loan Estimate, look at Section A (Origination Charges). Origination fees go to the lender for processing — they don’t reduce your rate. Only the line labelled “Discount Points” or “Points to reduce interest rate” should be entered in this calculator.
If You Expect to Refinance Within 3 Years, Skip the Points
When rates drop, homeowners typically refinance. If there’s a reasonable chance you’ll refinance within the break-even window — especially in a falling-rate environment — paying points is a losing bet. Save the cash and refinance at the lower rate when the time comes.
Frequently Asked Questions
Everything you need to know about discount points, rate buydowns, and how to interpret the calculator results.
Disclaimer: All results produced by the Mortgage Points Calculator are estimates for comparison and educational purposes only. Rate reduction per point, APR figures, and break-even calculations are modelled using the inputs you provide and standard amortization formulas. Actual lender pricing, APR, fees, and loan terms will differ. This tool does not account for tax implications, opportunity cost of invested capital, refinancing scenarios, or lender-specific origination fees. Always consult a licensed mortgage professional and review your official Loan Estimate before making any financial decision regarding discount points.