Mortgage rate and upfront-cost planning

Mortgage Points Break-Even Calculator

Compare paying discount points for a lower fixed rate with taking the same loan at zero points.

Loan amount Use the amount financed after the down payment.

Fixed loan term in years

Interest rate with zero points

Use the note rate from the zero-point quote.

Interest rate after paying points

Use the note rate tied to the quoted discount points.

Discount points

One point equals 1% of the loan amount. Enter 0.75 for three-quarters of a point.

Expected years before selling or refinancing

Additional holding months The holding period cannot exceed the selected loan term.

Results will appear after valid values are entered.

Upfront cost and monthly payment

This comparison isolates discount points. It assumes the loan amount and term are the same in both quotes and that the points are paid in cash at closing.

Cost of discount points—Percentage of the entered loan amount

Zero-point monthly principal and interest—Principal and interest only

Points-option monthly principal and interest—Same loan amount and term at the lower entered rate

Monthly payment savings—Zero-point payment minus points-option payment

Cash-flow break-even

Simple break-even divides the point cost by the monthly principal-and-interest savings. It answers how long the lower payment takes to recover the cash paid for points.

Break-even period—Based on monthly payment savings

Expected holding period—How long the modeled loan remains in place

Payment savings during holding period—Cumulative principal-and-interest payment difference

The holding-period comparison will appear with valid inputs.

Financing cost through the holding period

Principal is not treated as a financing cost because it reduces the loan balance. These cards compare interest paid through the selected month, with the point cost added to the lower-rate option.

Zero points

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Interest paid: —
Remaining balance: —

Pay discount points

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Interest paid: —
Points paid upfront: —
Remaining balance: —

Holding-period financing difference—Interest plus points through the selected period

Lifetime financing difference—Lifetime interest, with point cost added to the lower-rate option

What this estimate leaves out

The model does not include taxes, insurance, mortgage insurance, escrow changes, other closing costs, lender credits, investment returns on cash kept instead of paying points, future rate changes, or tax treatment of points and mortgage interest.

Compare actual Loan Estimates for the same loan type and confirm that the quoted points are tied to the lower rate. Other loan fees should be compared separately.

For educational purposes only. Results are estimates. Review the Calculator Methodology for shared assumptions, rounding, payoff timing, and privacy-conscious analytics details.