Free tool
Mortgage points calculator
Compare two fixed-rate quotes for the same loan amount and term. Enter both actual quoted interest rates, not APR. Defaults are examples, not current market rates. Points are paid upfront in cash, never financed. Your entries stay in your browser.
Estimate only, not a loan offer. Points paid upfront, not financed. Principal and interest only. Assumes other fees are equal; excludes taxes, insurance, PMI, tax effects, opportunity cost and prepayment penalties. No extra payments. Positive net savings favors points; negative favors zero points. Lender rounding may differ.
Are mortgage points worth paying?
Use the same loan amount and fixed-rate term for both offers. Ask the lender for a zero-point quote and a quote with discount points, and compare other fees separately. Discount points are different from origination fees and temporary buydowns. A lower quoted rate may save money only if you keep the mortgage long enough.
Two ways to compare
Simple cash break-even divides the upfront cost (loan × points ÷ 100) by the monthly payment saving. This measures payment cash flow only. The payment cash benefit at your holding month subtracts points from actual payments saved. A break-even beyond the term is not recovered before payoff.
Interest/equity-aware net savings compares payments made plus the balance still owed, adding points cost to the points offer. The difference equals interest saved minus points cost. It counts the difference in principal repaid, so it can differ from simple cash break-even. At month 0 the difference is just the negative points cost; at payoff both balances are zero. This is an undiscounted comparison, without investment returns or tax effects.
See the CFPB explanation of discount points and lender credits (retrieved October 8, 2026). The rate reduction depends on the lender and loan; there is no universal reduction per point.
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Common questions
How much does one mortgage point cost?
One discount point costs 1% of the loan amount. Fractional points are allowed. Here points are paid upfront in cash and are not added to the loan.
How much does one point reduce the interest rate?
There is no fixed rate reduction per point. Enter both actual lender quotes for the same loan amount, fixed-rate term and quote date. The default rates are examples, not market quotes.
What is the simple cash break-even?
It is the points cost divided by the monthly principal-and-interest saving, rounded up to a whole payment month. It excludes remaining loan balances. With no positive payment saving, positive points cost cannot be recovered this way.
Why is net savings different from payment savings?
At the chosen holding month, net savings compares cumulative payments plus the remaining loan balance for each offer, adding the upfront points cost to the points offer. It equals interest saved minus points cost and accounts for differences in principal repaid. Positive means the points offer costs less.
What happens at the end of the loan?
The final payment is capped at the amount owed, both remaining balances become zero, and savings stop accumulating. There are no extra payments in this comparison.
Does the calculator store my entries?
No. It runs in your browser without sending or storing entries or including form contents in analytics. You can print, download a PNG, copy the summary or download a monthly CSV.