Mortgage Points Calculator
Whether paying discount points to lower your mortgage rate is worth it: the cost, the monthly saving and how long until the points pay for themselves.
Buying points on $300,000 at 7% over 30 years (0.25% off per point)
| Points | Cost | Monthly saving | Break-even |
|---|---|---|---|
| 0.5 | $1,500 | $25.12 | 5 years |
| 1 | $3,000 | $50.11 | 5 years |
| 2 | $6,000 | $99.70 | 5 years 1 month |
| 3 | $9,000 | $148.76 | 5 years 1 month |
How this calculator works
Each point costs 1% of the loan and lowers the rate, typically by about 0.25%. The break-even is the cost divided by the monthly payment saving.
What it assumes
- The rate cut per point varies by lender and market; use the figures on your Loan Estimate.
Questions people ask
Are mortgage points worth it?
If you keep the loan past the break-even point, usually several years, and won't refinance soon. If rates might fall or you might move, keep the cash.
How much does one point lower the rate?
Often about 0.25 percentage points, but lenders price points differently; compare Loan Estimates.
Are points tax deductible?
Points paid to buy your main home are generally deductible as mortgage interest if you itemize; points on a refinance are deducted over the loan's life.
What are negative points?
Lender credits: you accept a higher rate and the lender pays part of your closing costs.
Related calculators
Sources
Updated by the RateHerald team. The maths is tested against worked examples; report a problem.