Mortgage points break-even calculator
Compare two entered fixed-rate assumptions and the up-front cost of discount points. This is a private educational estimate, not a lender quote or recommendation.
Compare points assumptions
Note rate, not APR.
One point equals 1% of the loan amount in this model.
Example estimate
Payment-only break-even in about 61 months
$66.12 lessprincipal and interest each month
The payment-only break-even falls within the 7-year horizon.
Correct the highlighted field to update your estimate. The last valid estimate remains shown.
- Modeled up-front points cost
- $4,000.00
- Zero-point principal and interest
- $2,594.39
- With-points principal and interest
- $2,528.27
- Cash outlay through entered horizon
- $1,554.10 less
- Modeled lifetime cash cost
- $19,803.31 less
Educational estimate only. It does not provide APR, a rate quote, offer, approval, loan qualification, tax advice, legal advice, or individualized financial advice.
Payment-only break-even divides the points cost by a lower modeled principal-and-interest payment. It excludes closing costs, taxes, insurance, mortgage insurance, escrow, opportunity cost, cash-out, lender pricing and actual loan disclosures.
Read the comparison together
A lower payment may eventually offset points, but that does not by itself establish that buying points is beneficial. Compare the entered ownership horizon and cash-outlay lines, then review actual Loan Estimate disclosures and a qualified professional as appropriate.
How points are modeled
Points cost equals the entered loan amount multiplied by the entered points percentage. The tool creates two full fixed-rate schedules with the same loan amount and term, then compares scheduled cash paid plus the points cost.
Cash outlay through the entered horizon is not a complete financial-benefit calculation because loan balances, taxes and other real costs may differ.
Review formulas and sourcesWorked example
$400,000 loan 6.75% versus 6.50% one point
Illustration only—not an available lender offer.
Review formulas and primary sources Read the corrections policy
Mortgage points questions
What is one discount point in this calculator?
It is modeled as 1% of the entered loan amount paid up front. Actual lender pricing and disclosures can differ.
Does the break-even mean I should buy points?
No. It is a payment-only timing calculation, not a recommendation or complete financial comparison.
Why is APR excluded?
APR depends on loan-specific charges and disclosures beyond this simplified model.