Mortgage Points Calculator
Does It Make Sense to Buy Down Your Rate?
Paying discount points can lower your mortgage rate—but the upfront cost only makes sense if you keep the loan long enough to recover it through monthly payment savings. Compare both options and see your estimated break-even point.
What are mortgage points?
Discount points are an upfront cost paid at closing in exchange for a lower mortgage interest rate. 1 point = 1% of the loan amount. On a $500,000 loan, 1 point = $5,000.
Cost of Points
$5,000
$500,000 × 1.000%
How long do you expect to keep this mortgage?
Consider when you might sell the property or refinance the loan—whichever you expect to happen first.
Break-Even Point
31 Months
Approximately 2 years and 7 months
This comparison focuses on Principal & Interest because taxes, insurance, HOA, and similar property costs generally remain the same in either scenario.
The lower rate may make sense based on your timeline.
Based on the information you entered, you would recover the estimated $5,000 cost of the discount points after approximately 31 months. If you expect to keep this mortgage for 7 years, that gives you approximately 4 years and 5 months of payment savings after reaching your break-even point.
Based on your assumptions, the lower-rate option reaches its break-even point before you expect to sell or refinance.
Your Timeline
Today
Pay $5,000 in points
Month 31
Break Even
7 years
Expected Sale / Refinance
Option A
Lower Upfront Cost
6.750%
Option B
Lower Interest Rate
6.250%
You save $164/month but pay $5,000 more upfront. Break even: 31 months.
Cost & Savings Summary
All figures are estimates.
Want Us to Compare the Options for You?
Mortgage pricing isn't only about finding the lowest rate. Our team can compare the rate, upfront cost, monthly payment, and your expected timeline to help you understand your options.
Compare My Mortgage Options
Mortgage Points Calculator Disclaimer
This calculator is provided for educational and illustrative purposes only. Results are estimates based solely on the information entered and do not constitute a Loan Estimate, loan offer, rate quote, rate lock, or commitment to lend.
Actual interest rates, discount points, APRs, payments, fees, and loan terms may vary based on borrower qualifications, property information, market conditions, lender requirements, and other factors.
The calculation compares estimated Principal & Interest payments and the upfront cost of discount points. It may not account for all financial considerations, including tax consequences, opportunity cost, or changes in your plans. Consult a qualified mortgage professional when comparing financing options.
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