Mortgage Points Calculator
Each discount point costs 1% of the loan and typically cuts the rate by ~0.25%. This calculator shows your break-even month, lifetime interest saved, and whether the upfront cost beats just investing it.
| Rate with points | — |
| Monthly P&I without points | — |
| Monthly P&I with points | — |
| Lifetime interest saved | — |
| Net savings (lifetime − cost) | — |
A mortgage point is a fee equal to 1% of your loan amount that lowers your interest rate by roughly 0.25%. Whether points pay off depends entirely on your break-even month and how long you keep the loan.
How Points Work
Lender charges 1% of loan amount per point upfront at closing. In exchange, the rate drops by about 0.25 percentage points per point. On a $400,000 loan, 2 points = $8,000 upfront for a 0.5% lower rate.
Break-Even Math
Break-even month = upfront points cost ÷ monthly P&I savings. If points cost $8,000 and save $130/mo, break-even is month 62 (~5.2 years). Hold the loan past break-even = points win.
When to Buy Points
Best when: you plan to stay 7+ years, you have cash that isn't earning more elsewhere, rates are rising (lock the lower rate), and you itemize taxes (points are deductible per IRS Publication 936).
When to Skip Points
Skip when: you may move or refinance within 3 years, you need cash for emergency reserves, the savings rate beats your investment alternative, or you're in a buyer's market where rates may drop soon.
Last updated May 2026. Sources: IRS Pub 936, CFPB Discount Points.