Mortgage Points Calculator
Discount points buydown cost, monthly savings, and break-even months.
What it does
Discount points trade cash at closing for a lower rate every month after. One point is 1% of the loan, so the question is always months: how long until the monthly savings repay the upfront charge.
The tool above takes loan amount with base rate, bought-down rate, and points charged. It returns monthly savings, break-even months, and points cost. The default $300,000 loan from 7% to 6.75% with 1 point saves $50.11 a month against $3,000.00 upfront, breaking even at 59.9 months.
Mechanics match Consumer Financial Protection Bureau guidance: points buy the rate down while lender credits do the reverse, and fractional points scale linearly. The Bureau works the same arithmetic this page checks, with $675 for 0.375 points moving payment about $14 a month.
Rate reduction per point floats with lenders and markets, so both rates stay user inputs here. Time value, taxes, and selling plans sit outside; the break-even month is the planning line, not the whole decision.
How to use
- Type the loan amount.
- Type the zero point base rate.
- Type the bought-down rate from the lender sheet.
- Type points charged, fractions allowed.
- Read savings first, break-even beside it.
- Compare break-even against your hold horizon.
Formula
- points
- Upfront charge in points; 1 point is 1% of the loan.
- M
- Monthly principal and interest at 30 year fixed math.
- break-even
- Months until savings repay the points cost.
Rate buydown per point is negotiated, never fixed, so the engine prices whatever two rates you type. Refinance break-even lives on its own page; this one prices purchase points.
Worked example
Example: $300,000, 7 to 6.75%, 1 point
Defaults: $300,000 loan, 7% base, 6.75% with 1 point.
- Cost: 300,000 x 1 / 100 = $3,000.00.
- Base payment: $1,995.91 a month.
- New payment: $1,945.79 a month.
- Savings: 1,995.91 minus 1,945.79 is about $50.11/mo.
- Break-even: 3,000 / 50.11 = 59.9 months.
- Tool shows $50.11/mo, 59.9 months, $3,000.00.
Reference table
| Case | Upfront | Monthly move |
|---|---|---|
| 1 point on $100,000 | $1,000 | Varies by buydown |
| 1 point on $300,000 | $3,000.00 | $50.11 at 7 to 6.75% |
| 0.375 points on $180,000 | $675 | About $14 (Bureau table) |
| 0.5 points on $100,000 | $500 | Half the 1 point cost |
| 0.125 points on $100,000 | $125 | Eighth point cost |
Limits
- Ignores time value of upfront cash.
- Taxes and deductions excluded.
- Assumes full hold past break-even.
- Adjustable rates need other math.
Common mistakes
- Assuming each point always buys 0.25%.
- Comparing break-even against loan term instead of hold time.
- Forgetting points raise cash to close.
- Mixing lender credits with discount points.
- Refinancing right after paying points.
Try it yourself
Quick checks. Answers sit tucked under each question.
1 point on $100,000?
$1,000 upfront cost.
0.375 points on $180,000?
$675 upfront cost.
Same rate both sides?
Rejected: the new rate must sit below base.
Questions
What is the default answer?
$50.11 a month savings with break-even at 59.9 months.
What is one point?
1% of the loan: $3,000 on $300,000.
Worth it?
Hold past break-even and yes; sell sooner and no.
Fixed buydown per point?
No. Lenders negotiate it daily; type both rates.
Refinance page versus this?
That prices refinance closing break-even; this prices purchase rate buydown.
Fractional points?
Allowed: 0.375 points on $180,000 is $675.