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Calculators/Real Estate & Mortgages

Mortgage Points Calculator

See how long it takes for discount points to break even — and how much you'd save over the loan life.

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How to Use This Calculator

1. Enter your loan amount.

2. Enter the rate without buying points, and the rate with buying points.

3. Enter the number of discount points you'd buy (1 point = 1% of loan amount).

4. The calculator shows your break-even month — how long you must keep the loan for points to pay off.

Real-World Examples

$400k loan, 7.0% → 6.625% for 1 point ($4,000), 30 years:
Monthly savings: ~$96 | Break-even: ~42 months (3.5 years)
$300k loan, 7.25% → 7.0% for 1 point ($3,000):
Monthly savings: ~$52 | Break-even: ~58 months (4.8 years)

Frequently Asked Questions

How much does 1 point reduce your rate?

Typically 0.125%–0.25% per point, but this varies by lender, loan type, and market conditions. Always get your lender's specific quote.

Are points tax deductible?

Mortgage discount points paid on a primary residence purchase are generally fully deductible in the year paid if you itemize (IRS Publication 936). Points on refinances must be amortized over the loan life.

When does buying points make sense?

If you plan to keep the mortgage past the break-even point. If you might move or refinance within 3–5 years, buying points often isn't worth it.

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