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Mortgage Discount Points Break-Even Calculator

Math

Compare a loan with no discount points against the same loan at a reduced rate bought with points costing a percentage of the loan amount, and compute the monthly savings and the break-even month where cumulative savings recoup the points cost.

Enter a loan amount, term, and base interest rate, then the cost of discount points as a percent of the loan and how much they reduce the rate, and see whether buying points is actually worth it. It amortizes the loan twice with the same fixed-rate formula the Loan / Mortgage Calculator uses, once at the base rate and once at the reduced rate, then compares the two monthly payments to find the break-even month where cumulative savings recoup what the points cost. It also reports total interest for both scenarios side by side, so a lower payment that still costs more in total interest over a shorter stay doesn't get missed.

financeloanmortgagepointsbreak-evencalculator

How to use Mortgage Discount Points Break-Even Calculator

  • 1.Enter the loan amount, the base annual interest rate with no points, and the term in years.
  • 2.Enter the points cost as a percent of the loan amount (e.g. 1 for one point) and how many percentage points the rate drops.
  • 3.Read off the points cost, monthly savings, and the break-even month, then compare total interest between the two scenarios.

Frequently asked questions

What counts as one discount point?
By convention one point costs 1% of the loan amount and typically buys a modest rate reduction; this tool lets you enter any points cost percent and rate reduction directly, so it works for partial points and lender-specific pricing too.
What happens if I never stay in the loan long enough to break even?
If your break-even month is longer than you plan to keep the loan (before selling or refinancing), buying the points likely doesn't pay off even though it lowers your monthly payment.
Does this account for the tax deductibility of points?
No, it's pure amortization math on the stated numbers. Points may be deductible in some circumstances, which would shift the real break-even point; consult a tax professional for that.
What if the rate reduction is zero?
The two scenarios amortize identically, so monthly savings is zero and the break-even month is reported as null since the points cost is never recouped.

Use via API, SDK, or MCP

cURL# Free: 1,000 req/day · Pro: 10,000 req/day
curl -X POST https://api.utilix.tech/v1/tools/mortgage-points-calculator \
  -H "Authorization: Bearer utx_live_..." \
  -H "Content-Type: application/json" \
  -d '{"loanAmount":300000,"baseRatePercent":6.5,"termMonths":360,"pointsCostPercent":1,"rateReductionPercent":0.25}'

Get an API key from your dashboard · Full API docs →

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