Mortgage Points Calculator
Points buy a lower rate with money up front. They only pay off if you keep the loan past the break-even. Most people move or refinance long before that, and simply lose the money. This leads with the number that decides it.
You break even after
-
- The points cost
- $0
- Rate becomes
- 0%
- Payment without points
- $0
- Payment with points
- $0
- Saved each month
- $0
What each choice costs
The taller bar costs more over the whole period. Cheaper is not automatically right, but choosing the dearer one should be deliberate.
Move it and watch
-
at {v} for how much you are borrowing
And what you can change
Why your own figure may differ
Every amount of points
Notice that the break-even barely moves as you buy more. Cost and saving rise together, so buying extra points does not change the timing - only the size of the bet.
| Points | Cost | New rate | Saved monthly | Break-even |
|---|
Mortgage points: real examples
Three offers where the break-even decides it. Click any card to load it.
- A typical offer
One point on a $300,000 mortgage
Costs $3,000, cuts the rate a quarter of a percent.
The payment falls a little, but you need years to earn back the $3,000. The break-even is the whole decision.
Load this scenario in the calculator → - Buying two
Two points for half a percent
Twice the cost, twice the rate cut.
The saving doubles and so does the cost, so the break-even barely moves. Buying more points does not change the timing.
Load this scenario in the calculator → - Moving in five years
The same offer, a shorter stay
You expect to move before the break-even.
You never get the money back. The points are simply lost, which is what happens to most people who buy them.
Load this scenario in the calculator →
Common questions about mortgage points
What are mortgage points?
Money paid up front to get a lower rate for the life of the loan. One point costs 1% of what you borrow. On a $300,000 mortgage that is $3,000, and it typically cuts the rate by around a quarter of a percent - though the exact trade varies by lender, so use the numbers you have actually been quoted.
Are points worth buying?
Only if you keep the loan past the break-even point. Pay $3,000 to save $48 a month and you need about five years just to get back to where you started. Stay longer and you win. Move, refinance or pay it off sooner and you have simply handed the lender extra money.
What is the break-even?
The cost of the points divided by the monthly saving. It is the single number that decides this. If it is longer than you realistically expect to keep the mortgage, points are a bad deal no matter how attractive the lower rate looks.
Most people do not keep a mortgage 30 years, do they?
No, and that is the crux. People move and refinance far sooner than the loan term suggests. A break-even of seven years is only useful if you are genuinely confident about seven years - and most of us are not. Be honest about that rather than optimistic.
Could I use the money better elsewhere?
Often, yes. The same cash as a larger deposit might remove mortgage insurance entirely, which can beat the rate saving. Or held as an emergency cushion, where it stays reachable. Points lock the money into the house permanently - you cannot get it back if things change.
Are points tax deductible?
They can be, and that changes the maths. Whether and when you can deduct them depends on your circumstances and the current rules, which change. We do not state a rule here because it genuinely varies - ask a tax professional about your own position rather than assuming.