Calculators · Buying & Financing
Discount Points Calculator
Compare up to three rate and point options from a lender, see each break-even month, and find the cheapest choice for the number of years you expect to keep the loan.
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How this calculator works
A discount point costs 1% of the loan and lowers the note rate permanently. Whether it pays off depends on how long you keep the loan: sell or refinance before the break-even, and the points cost more than they saved.
Enter the options from the same lender on the same day, including any lender credit for a higher rate.
- Upfront cost = points × loan amount − lender credit.
- Break-even = extra upfront cost ÷ monthly savings, compared with the first option.
- Cost over your horizon adds payments, the upfront cost and the balance left, so all options are compared on the same footing.
Worked example
Example values are illustrative, not quotes or market data. These are the numbers the calculator above starts with.
Inputs
- Loan amount
- $350,000
- Loan length
- 30 years
- Years you expect to keep the loan
- 7
- No points
- Rate % 6.75% · Points 0
- 1 point
- Rate % 6.5% · Points 1
- 2 points
- Rate % 6.25% · Points 2
Results
- No points payment / upfront
- $2,270 / $0
- 1 point payment / upfront
- $2,212 / $3,500
- 2 points payment / upfront
- $2,155 / $7,000
Common questions
How much does one point lower the rate?
It varies by lender and market. Ask for a written comparison of rate options; do not assume a fixed amount.
Are points tax-deductible?
Points on a purchase of a main home may be deductible; rules differ for refinances. Ask a tax professional.
What is the difference between points and a temporary buydown?
Points lower the note rate for the life of the loan. A temporary buydown lowers your payment for the first one to three years while the note rate stays the same.
Related calculators
- Temporary Buydown Calculator (2-1, 1-0, 3-2-1)
- Refinance and Cash-Out Calculator
- Compare Mortgage Scenarios
- All calculators
Estimate only. Actual loan terms, eligibility, insurance, taxes, and settlement charges require verification. These are planning estimates, not a lender Loan Estimate, Closing Disclosure, appraisal, or approval. Michael O'Neal is a real estate broker, not a lender, appraiser, attorney or tax adviser.
Next step
Want a real financing quote? Connect with Home Front Mortgage.
Andrew Fairleigh, Mortgage Loan Originator, Home Front Mortgage, NMLS #1878546. (979) 595-8979 · [email protected]
Rates in these calculators are examples, not Home Front quotes. Your application goes to Home Front's secure site. Do not send financial documents through this website.
Affiliated business arrangement disclosure. This is to give you notice that some agents and owners at Keller Williams Realty Northeast, including Michael O'Neal, have a business relationship with certain providers of services related to your purchase, sale or refinance of real estate, including Home Front Mortgage and Keystone Title & Escrow. Because of this relationship, a referral may provide some owners and agents at Keller Williams Realty Northeast a financial or other benefit. You are NOT required to use either company as a condition for your purchase, your financing or refinance, or any other transaction related to a property. There are frequently other providers available with similar services. You are free to shop around to determine that you are receiving the best services and the best rate for these services. You will be given the written Affiliated Business Arrangement Disclosure, including estimated charges, to review and sign.