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Mortgage Points Break-Even Calculator
Paying points upfront lowers your rate and monthly payment — but only makes sense if you stay long enough to recoup the cost. Find your exact break-even point.
Educational calculators — always consult a licensed professional before making financial decisions.
Home price minus down payment.
The baseline rate your lender is offering.
Each point typically reduces your rate by 0.25%. Your lender will quote this.
1 point = 1% of loan amount. Ask your lender for the exact cost.
Break-even point
61 months (5.1 yrs)
Stay longer and points save you money
Without Points vs. With Points
30-Year Interest Comparison
Analysis assumes you keep the loan for the full term. If you refinance or sell before break-even, points cost money. Consult a licensed mortgage professional.
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What you'll need
- ·Loan amount
- ·Rate without points
- ·Rate with points (lender will quote both)
- ·Total cost of the points
What you'll get
- ✓Break-even month — When points start saving you money
- ✓Monthly savings — Payment reduction with points
- ✓30-year net savings — After recouping points cost
- ✓Worth-it verdict — Based on full loan term
How it works
Enter loan and rate details
Input loan amount, current rate, and the offered rate with discount points.
Calculate point cost
Each point costs 1% of the loan — one point on $300K = $3,000 upfront.
Find break-even month
Break-even = point cost ÷ monthly savings. Stay past that and points pay off.
Points Break-Even: $400,000 Loan
| Points | Cost | Rate Reduction | Monthly Savings | Break-Even |
|---|---|---|---|---|
| 0.5 | $2,000 | 0.125% | $28 | 71 months |
| 1.0 | $4,000 | 0.25% | $56 | 71 months |
| 2.0 | $8,000 | 0.5% | $112 | 71 months |
Buy points if you plan to stay beyond the break-even month.
State guides
How this varies by state
Property taxes, insurance costs, first-time buyer programs, and closing costs differ significantly across states. See local data for your state.
California
Texas
Florida
New York
Illinois
Pennsylvania
Ohio
Georgia
North Carolina
Michigan
New Jersey
Virginia
Washington
Arizona
Colorado
Tennessee
Frequently asked questions
What are mortgage points?+
Mortgage discount points are upfront fees you pay to permanently lower your interest rate. One point costs 1% of your loan amount and typically reduces your rate by 0.25% (though this varies by lender and market conditions). Paying points makes sense if you'll stay in the home long enough to recoup the upfront cost through lower monthly payments.
How long does it take to break even on mortgage points?+
Break-even time = cost of points ÷ monthly savings. For example, if points cost $8,000 and save you $120/month, you break even in 67 months (about 5.5 years). If you sell or refinance before that, you lose money on the points. If you stay longer, points come out ahead.
Are mortgage points tax deductible?+
In many cases, yes. Discount points paid on a purchase mortgage are often fully deductible in the year paid. Points on a refinance are typically deducted over the life of the loan. Consult a tax professional for your specific situation, especially if you itemize deductions.
How many mortgage points can I buy?+
Lenders typically allow 0 to 4 points, though some allow more. Each additional point provides diminishing rate reductions — the first point might drop your rate by 0.25% while the third point might only improve it by 0.125%. Ask for a full quote sheet showing rate options at 0, 1, 2, and 3 points to find the sweet spot.
Should I buy points if I might refinance in a few years?+
Generally no — refinancing resets the clock on your break-even. If you pay $8,000 for points with a 67-month break-even but refinance in year 3, you lose money. Only buy points when you're confident you'll keep the loan long enough to recoup the cost. If rates might fall, holding liquid cash for a future refinance may be smarter.
Are points worth it for you?
Back to the calculator ↑Read next
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First-Time Home Buyer Guide
The complete first-time buyer journey for 2026 — from deciding whether to buy through getting the keys and your first year: every step and cost, FHA/conventional/VA/USDA loans, down-payment assistance, and a free calculator at each phase.
Is Refinancing Worth It?
Closing costs divided by monthly saving is the whole decision. The formula worked with July 2026 rates, the rate drop you need to break even in 2/3/5 years, the term reset that raises your total interest at a lower rate, and what forecasters actually expect.
Points Break-Even Calculator is built and maintained by the RealCostIQ editorial team. Cost ranges and rates are checked against published industry data and contractor quotes, and revised when the underlying figures move. Read our data methodology or more about who builds this. Every calculation runs in your browser — no account, and none of your inputs are stored.
Cost ranges and rates here are checked against contractor quotes and published industry data. If a number still looks off, email Support@RealCostIQ.com and we'll review and fix it.