Mortgage points calculator
One point equals 1% of the loan amount paid upfront for a lower rate. This tool shows when that payment pays for itself.
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How to use it
- Enter loan amount, loan term, rate without points, points bought and rate with points.
- The result appears straight away and updates as you edit.
- Copy the result, or copy a link that keeps the same values to share it.
How it is calculated
Points cost = loan x points / 100. Monthly saving = payment at the base rate - payment at the reduced rate. Break-even = cost / monthly saving.
Example
Inputs: Loan amount = 800,000, Loan term = 25 years, Rate without points = 6 %, Points bought = 1, Rate with points = 5.75 %. Result: Break-even: 65.8 months; Cost of points: 8,000.00; Monthly saving: 121.56.
Limits and caveats
- The rate cut per point varies by lender, so enter the rate you are offered.
- Ignores what the points money could earn elsewhere and any tax effect.
Questions about this tool
What does one point cost?
One point is 1% of the loan amount, so a point on a 500,000 loan costs 5,000.
When are points worth buying?
When you plan to keep the loan longer than the break-even period without selling or refinancing.
Are points offered everywhere?
They are common in the US market. Lenders elsewhere may offer an upfront fee for a lower rate, which works the same way.