Mortgage Points Break-Even Calculator
Fill in the values and the answer updates as you type.
How the Mortgage Points Break-Even Calculator works
One point costs 1 percent of the loan. Monthly savings = payment at the original rate − payment at the reduced rate, using P × r ÷ (1 − (1 + r)^−n). Break-even months = cost of points ÷ monthly savings. If you sell or refinance before that point, the points lose money. The reduction per point varies by lender, so use the figure on your loan estimate. Example: One point on a $400,000, 30-year loan at 7 percent costs $4,000 and cuts the rate by 0.25 points. It saves $66.82 a month, breaks even in 59.9 months, and nets $1,612.68 over 7 years.
Inputs and results
The Mortgage Points Break-Even Calculator takes 6 inputs and gives 4 results.
What you enter
- Loan amount ($) — starts at 400000.
- Rate without points (%) — starts at 7.
- Loan term (years) — starts at 30.
- Points to buy — starts at 1.
- Rate reduction per point (%) — starts at 0.25.
- Years you expect to keep the loan (years) — starts at 7.
What you get
- Break-even point (months)
- Monthly payment savings
- Cost of the points
- Net savings over your holding period
Example: Mortgage Points Break-Even Calculator with the starting values
With loan amount 400000 $, rate without points 7 %, loan term 30 years, points to buy 1 and rate reduction per point 0.25 %, the calculator returns:
| Break-even point (months) | 59.9 |
|---|---|
| Monthly payment savings | $66.82 |
| Cost of the points | $4,000 |
| Net savings over your holding period | $1,612.68 |
Change any value above and the results update straight away.
Mortgage Points Break-Even Calculator FAQ
How do I use the Mortgage Points Break-Even Calculator?
Enter loan amount, rate without points, loan term and points to buy in the fields, then read break-even point (months), monthly payment savings, cost of the points and net savings over your holding period in the result panel. The answer updates as you type, and you can press Calculate or Enter to refresh it. Use “Copy link” to share your exact numbers with someone else.
What does the Mortgage Points Break-Even Calculator calculate?
Whether buying discount points pays off before you sell or refinance. It returns break-even point (months), monthly payment savings, cost of the points and net savings over your holding period from the 6 values you provide.
What values does the Mortgage Points Break-Even Calculator start with?
It opens with loan amount 400000 $, rate without points 7 %, loan term 30 years and points to buy 1 so you can see a working result straight away. Replace them with your own numbers, or press Reset to return to these starting values.
Is the Mortgage Points Break-Even Calculator free and private?
Yes. It is free, needs no account, and runs in your browser, so nothing you type is sent to or stored on our servers. See the Privacy Policy for details.
Can I rely on the Mortgage Points Break-Even Calculator for financial decisions?
Treat the result as a well-rounded estimate. Real situations often have details a general calculator cannot know, so confirm financial decisions with a qualified professional. See the Disclaimer for more.