Mortgage Points Calculator Online

Evaluate the financial implications of buying discount points with our user-friendly Mortgage Points Calculator.

The Mortgage Points Calculator is a tool designed to help prospective homeowners determine the potential benefits of buying discount points when securing a mortgage. Discount points are fees paid upfront to the lender at closing in exchange for a reduced interest rate on the loan, often leading to lower monthly payments (read more about mortgage points). The calculator provides a detailed evaluation, taking into account the loan amount, the interest rate without points, the percentage of the loan amount represented by the points, and the new interest rate with points. It then estimates the monthly savings, the cost of buying points, and the breakeven point in months after which the savings will exceed the cost.

The Mortgage Points Calculator can be instrumental in the decision-making process, offering users a glimpse into the financial implications of buying points. By determining the breakeven point, users can make informed decisions based on their unique circumstances such as the length of time they plan to stay in the home. However, it’s essential to recognize the calculator’s limitations. It offers estimates based on the input values and doesn’t consider changes in personal financial circumstances, potential benefits from investing the points’ cost elsewhere, or changes in future interest rates. Therefore, while the tool can provide valuable insight, it’s always prudent to consult with a financial advisor or mortgage professional for a comprehensive analysis.

How To Use Our Mortgage Points Calculator


Input Loan Information and Points

Enter the amount of the loan you intend to take out and the interest rate without buying points. Then, specify the percentage of the loan amount that you are considering paying as points. Remember, each point usually costs 1% of the loan amount and reduces your interest rate by a certain percentage (often 0.25%).


Specify the New Interest Rate

Enter the new interest rate you would secure if you purchased the points. This is the lower interest rate that the lender offers in exchange for the upfront payment of the points.


Calculate and Evaluate the Output

Click the "Calculate" button. The calculator will estimate your monthly savings from the lower interest rate, the upfront cost of buying the points, and the breakeven point in months when the savings from the reduced payments equal the upfront cost of the points. Use these results to determine if buying points could be beneficial based on your specific circumstances. As always, consult a financial advisor or mortgage professional for a comprehensive evaluation.


Mortgage Points Calculator