Finance & Economics / Real Estate Investment

Mortgage Points Break-Even Calculator

Loan Amount ($)

Base Interest Rate (%)

Discounted Rate (with points) (%)

Points Cost (% of loan)

Loan Term (years)

Mortgage points (also called discount points) are fees paid upfront to reduce your interest rate. Each point typically costs 1% of the loan amount.

Formula: M = P[r(1+r)^n]/[(1+r)^n-1]

Where: M = Monthly payment, P = Principal, r = Monthly interest rate, n = Number of payments

Decision guide: Buy points if you plan to stay in the home longer than the break-even period.

See Also