Mortgage Points vs Rate Guide for Cost Comparison (2026)
Compare mortgage points vs rate: discount points cost, rate reduction, break-even analysis, and mortgage payment optimization.
Summary
Points lower mortgage rate but cost upfront. This guide explains cost, benefit, and break-even analysis.
Key Steps
- 1Understand points: 1 point = 1% of loan amount, typically 0.25% rate reduction.
- 2Calculate cost: $200,000 loan, 1 point = $2,000 upfront.
- 3Estimate savings: rate reduction lowers monthly payment over loan term.
- 4Find break-even: months to recoup point cost from monthly savings.
- 5Decide based on time: stay longer than break-even to benefit from points.