Mortgage Points Break-Even Calculator
Estimate when the monthly savings from paying points passes the upfront cost.
PRELIMINARY ESTIMATE - NOT A QUOTE
Enter the principal-and-interest payments your lender quotes with and without points, so you compare the same loan terms.
Break-Even Analysis
estimated monthly savings
break-even months
break-even years
Educational calculation only. It does not account for all tax consequences, opportunity cost, refinancing, loan amortization differences or future changes. Obtain actual mortgage pricing from a licensed lender.
Think about refinancing and cash reserves before you pay points.
If you refinance or sell before the break-even, you may never recover the upfront cost. And a buyer with exactly enough to close may be better served keeping reserves than spending every dollar on points.
Points FAQ
What does "one point" mean?
One point generally equals 1% of the loan amount. The amount of rate reduction a point purchases is not fixed; it depends on lender pricing.
Are points tax deductible?
Tax treatment depends on the circumstances. Ask a qualified tax professional and consult current IRS guidance.
Can a seller pay points?
Seller concessions may potentially be used for eligible discount points within applicable loan rules. That can be powerful in negotiation.