Mortgage Points Calculator
Decide whether buying mortgage points is worth it for your situation.
Points Cost vs Rate Reduction
Points Purchased:1.0
Point Cost:$ 3000
Rate Without Points:6.50%
Rate With Points:6.250%
Rate Reduction:0.25%
Each point costs 1% of loan amount and reduces rate by ~0.25%.
Monthly Payment Comparison
Payment (No Points):$ 1896.20
Payment (With Points):$ 1847.15
Monthly Savings:$ 49.05
Break-Even Analysis
Break-Even (months):61
Break-Even (years):5.1
Your Planned Stay:7 years
Break-even: months until monthly savings equal the point cost.
Net Savings Over 7 Years
Total Interest (No Points):$ 382633
Total Interest (With Points):$ 364975
Interest Saved:$ 17659
Net Savings:$ 1120
Recommendation
BUY POINTS: You'll break even in 5.1 years and save $1120 over 7 years.
Mortgage Points Tips
- Points are upfront fees paid to lower your mortgage rate
- Each point = 1% of loan amount, reduces rate by ~0.25%
- Best for long-term homeowners: need to stay past break-even
- Points are tax-deductible as mortgage interest (primary residence)
- Negotiate: lenders may offer free points or lower point costs
- Compare: sometimes better to use that money for down payment