Rate buydown analysis
Mortgage Points Calculator — Is Buying Down Your Rate Worth It?
Quick answer: This mortgage points calculator shows how much points cost, how much they reduce your monthly payment, and how long it takes to break even.
The real question is not just “Will my payment drop?” It is “Will I stay long enough for the upfront cost to pay off?”
Mortgage points confuse a lot of borrowers because they trade a one-time cash hit for a smaller monthly payment later. That can be smart, wasteful, or somewhere in between depending on how long you keep the loan. This page is built to answer that exact tradeoff in plain numbers.
Mortgage Points Calculator
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Compare the loan with points versus the loan without points
Enter the base loan details below, choose how many points you want to buy, and see whether the monthly savings recover the upfront cost before you expect to move or refinance.
Planning estimate only. This page uses the common rule of thumb that one point costs 1% of the loan amount and lowers the rate by about 0.25 percentage points.
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When buying points usually makes sense
Buying points usually works best when you plan to hold the loan long enough to reach break-even and then keep collecting savings after that point. It also tends to make more sense on larger loan balances because the monthly savings become more meaningful relative to the fixed upfront cost.
The biggest risk is prepaying for savings you never get to enjoy. If you refinance early, move sooner than expected, or sell the home before break-even, the points may not fully pay for themselves.
How discount points affect your loan
1. You pay cash up front
Points usually cost 1% of the loan amount per point. That means a bigger loan balance makes points more expensive in absolute dollars.
2. Your rate drops
A common planning assumption is that each point reduces the rate by about 0.25 percentage points, though actual lender pricing can vary.
3. Your monthly payment falls
Because the rate is lower, the principal-and-interest payment drops too. That monthly difference is what eventually repays the cost of the points.
4. Break-even decides the move
If you stay beyond break-even, points may be worthwhile. If you expect to exit the loan earlier, keeping the cash may be the smarter play.
Frequently Asked Questions
It depends on whether you expect to keep the loan long enough for the monthly savings to recover the upfront cost. Break-even is the key number.
A common rule of thumb is that one point lowers the rate by about 0.25 percentage points, though exact lender pricing can differ.
Break-even is the number of months it takes for your monthly payment savings to add up to the upfront cost of the points.
If you refinance, move, or sell before break-even, the points may not have enough time to pay for themselves.
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