Mortgage Discount Points Calculator
Buying down the rate only pays off if you keep the loan long enough. Find out how long.
What This Calculator Does
Prices discount points against the rate reduction they buy: what the points cost at closing, how much they lower the monthly payment, and how many months of that saving it takes to recover the upfront outlay. Past that month the points are profit; before it, they are a loss.
Who Is This For
Buyers deciding between a lower rate and lower closing costs, refinancers weighing points against a shorter payback horizon, and anyone comparing lender quotes where one is priced with points and the other is not.
How It Works
Enter the loan amount, the rate quoted without points, the number of points offered and the rate reduction each one buys, and how long you expect to keep the loan. The calculator returns the cost, the monthly saving, and the break-even month.
Frequently Asked Questions
What is a mortgage point?
One discount point costs 1% of the loan amount, paid at closing, and buys a lower interest rate for the life of the loan. Typical pricing lowers the rate by roughly 0.125-0.25% per point, though the exact trade varies by lender and moves day to day.
How do I find the break-even?
Divide what the points cost by the monthly payment they save. The result is how many months you must keep the loan to get your money back. Hold it longer and you are ahead; sell or refinance sooner and you paid for a benefit you never collected.
Should I buy points?
Only if your realistic horizon comfortably clears the break-even month. Buyers who expect to move, refinance, or pay the loan down early are usually better served putting the same cash toward the down payment or holding it in reserve.
Are points the same as origination fees?
No, though both are quoted as a percentage of the loan and both sit on the same page of the estimate. Discount points buy down the rate. Origination charges compensate the lender for making the loan and buy you nothing. Read the labels carefully when comparing quotes.
Do points make sense at today's rates?
With benchmark 30-year rates near 6.6-6.7% in mid-2026, many borrowers expect to refinance if rates fall, which shortens the effective horizon and works against paying points. If you genuinely intend to hold the loan long term, the arithmetic can still favour them. Run your own horizon instead of assuming.
Are points tax deductible?
Points paid to reduce the rate on the purchase of a primary residence are often deductible, sometimes in the year paid and sometimes spread across the loan term, and points paid on a refinance are usually treated differently. That is a question for your tax advisor rather than for a calculator.