Mortgage points calculator
What discount points cost, how much they lower your payment and how long until they pay off.
- ๐บ๐ธ US federal & state rules
- 1 point = 1% of the loan, per CFPB
- See sources
Break-even
61 months (5 years 1 month)
$3,500 up front saves $57.86 a month
- Cost of points
- $3,500
- New rate
- 6.5%
- Monthly savings
- $57.86
- Net after 7 years
- You come out $2,659 ahead
This is an example. Enter your numbers above and press the button to see your own result.
Net result by years kept
| 3 years | -$865 |
|---|---|
| 5 years | +$898 |
| 7 years | +$2,659 |
| 10 years | +$5,280 |
| 15 years | +$9,491 |
| 30 years | +$17,328 |
- One point costs 1% of the loan. How much the rate drops per point varies by lender, so use the numbers on your Loan Estimate.
- If you sell or refinance before the break-even month, the points cost more than they save.
- Points on a home purchase may be tax deductible. That is not included here.
Show the math
| Cost | $350,000 ร 1% = $3,500 |
|---|---|
| New rate | 6.75% โ 1 ร 0.25% = 6.5% |
| Payment without points | $2,270.09 |
| Payment with points | $2,212.24 |
| Break-even | $3,500 รท $57.86 = 60.5 months |
| Net after the years you keep it | monthly savings ร months + lower balance โ cost of points |
What to do next
How it works
The cost of points is the loan amount times the number of points, as a percent. The new rate is the starting rate minus points times the cut per point. Monthly savings is the difference between the two payments.
Break-even is the cost divided by the monthly savings. The net result for the years you keep the loan adds the payment savings and the smaller balance you owe at that time, then subtracts the cost.
Things to keep in mind
If you might sell, refinance or pay off the loan early, points are less likely to pay off. Lender credits work the other way: a higher rate in exchange for lower closing costs.
Sources
Rules applied as of 2026-10-19. See the sources below for details.
- CFPB: What are discount points and lender credits?Checked 2026-10-19
Frequently asked questions
How much does one mortgage point cost?
One point is 1% of the loan amount. On a $350,000 loan, a point costs $3,500.
How much does a point lower the rate?
It depends on the lender and the market. A quarter of a percentage point per point is common, but offers range from about 0.125% to 0.375%.
When do points pay off?
Divide the cost by the monthly savings. In the default example, $3,500 saves about $58 a month, so it takes about 61 months, just over 5 years, to break even.
Are points tax deductible?
Points on a loan to buy your main home are often deductible as mortgage interest if you itemize. Check IRS Publication 936 or a tax preparer.