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Home, Property & Mortgages

Mortgage Points Calculator

Decide whether buying mortgage discount points is worth it by finding the break-even month and net lifetime saving.

Your inputs

Ask your lender — 0.25 % per point is common but not universal.

Results

Break-even (months)

61

Cost of points
$6,000.00
New rate
6.5%
Monthly saving
$99.71
Net lifetime saving (interest saved − cost)
$29,887.34

✓Exact calculation — rounded only for display

Inputs are never added to links for financial, salary or health calculators.

What this calculator does

Discount points are upfront fees that lower your interest rate. They pay off only if you keep the loan long enough for the monthly savings to exceed the cost.

Formula and method

Cost = loan × points × cost per point; New rate = rate − points × reduction per point Break-even months = ceiling(cost ÷ monthly saving)

Worked example

Calculated by this tool with its default inputs:

Inputs

  • Loan amount: 300000 (any currency)
  • Rate without points: 7 %
  • Term: 30 years
  • Points to buy: 2
  • Rate reduction per point: 0.25 %
  • Cost per point (% of loan): 1 %

Results

  • Break-even (months): 61
  • Cost of points: 6,000
  • New rate: 6.5%
  • Monthly saving: 99.71
  • Net lifetime saving (interest saved − cost): 29,887.34

How to read the results

If you might sell or refinance before the break-even month, points are usually not worthwhile.

Assumptions and limitations

  • Rate reductions per point vary by lender and market.
  • Tax treatment of points differs by jurisdiction.

Financial results are estimates based on the inputs and assumptions shown. They are not financial advice; confirm figures with your lender, provider or a qualified adviser before making decisions.

Questions

What is one point?

Usually 1 % of the loan amount.

Methodology and verification

Result type
Exact mathematical calculation (rounded only for display)
Formula version
1.0
Automated verification
3 reference and validation test cases, checked against independently computed values. The site cannot be built if any of them fail.
Editorial review
Awaiting human editorial review. The explanation was drafted with AI assistance; the formula and examples are verified by the automated tests above.

Privacy

Everything you enter is calculated in this browser and is not sent to Numerith or anyone else. Because this calculator can involve personal financial or health details, your inputs are never added to share links or saved to history. Privacy policy