🎯 Mortgage Points Calculator
See what mortgage discount points cost, how much they lower your monthly payment, and how long it takes to break even.
How the Mortgage Points Calculator Works
Discount points are an upfront fee paid at closing in exchange for a lower interest rate. One point usually costs 1% of the loan amount. How much each point lowers the rate varies by lender and market conditions; 0.25 percentage points per point is a common reference, but use the figure from your own loan estimate.
The calculator compares the monthly payment with and without points and divides the cost of the points by the monthly savings to find the break-even point. If you expect to keep the loan longer than that, the lower rate recovers the upfront cost; if you sell or refinance sooner, it does not. It also shows the net savings over the number of years you expect to keep the loan.
Formula
Cost of points = loan amount × number of points × 1% New rate = base rate − points × rate reduction per point Monthly savings = payment at base rate − payment at new rate Break-even (months) = cost of points ÷ monthly savings
How to Use It
- Enter the loan amount, term, and the rate without points.
- Enter the number of points and the rate reduction per point from your lender.
- Enter how many years you expect to keep the loan.
- Compare the break-even point with how long you plan to keep the loan.
Frequently Asked Questions
How much does one mortgage point cost?
One point typically costs 1% of the loan amount. On a 350,000 loan, one point is 3,500.
How much does a point lower the rate?
It depends on the lender and market; 0.25 percentage points per point is a common reference, but the actual figure appears on your loan estimate.
How do I calculate the break-even point on points?
Divide the cost of the points by the monthly payment savings. If points cost 7,000 and save 116 a month, break-even is about 61 months.
Are discount points the same as origination points?
No. Discount points buy a lower rate; origination points are a lender fee for processing the loan and do not lower the rate.
Related Glossary Terms
Related Calculators
- 🏠 Mortgage Calculator — Estimate your monthly mortgage payment including taxes, insurance, and PMI.
- 🔄 Mortgage Refinance Calculator — Compare your current mortgage with a refinance: new payment, savings, and break-even month.
- 🏡 Closing Costs Calculator — Estimate the one-time costs due when you close on a home purchase.
- 🧾 APR Calculator — Find a loan’s true APR including origination and other upfront fees.
Formula and content last reviewed: September 2026. All calculations run in your browser — nothing you enter is sent to or stored on our servers.
Guide: understanding your result
- One discount point costs 1% of the loan amount and typically lowers the rate by a fraction of a percentage point — the exact reduction varies by lender.
- Break-even months = cost of points ÷ monthly payment saving.
- Points pay off only if you keep the loan (no refinance or sale) beyond the break-even point.
Worked example
On a $350,000 30-year loan at 6.76%, paying 1 point ($3,500) to get 6.51% lowers the payment by $57.88 a month. Break-even: about 61 months.
Common mistakes to avoid
- Assuming every lender gives the same rate reduction per point.
- Buying points shortly before a likely refinance or move.
Official sources
Examples are calculated live from the same data the calculator uses and are for education only — they are not financial, tax or investment advice.
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See all →✔ Reviewed by GelirLab Editöryal Ekibi · Last reviewed: September 2026 · How we check our calculators