Free online mortgage points calculator. Compare the cost of buying discount points against long-term savings from lower interest rates. | No registration · Data stays on your device
Zero Dependencies · Works OfflineEnter loan amount, original rate, and points to purchase. Compare total cost differences and payback period.
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Frequently Asked Questions
What are mortgage discount points?
Mortgage discount points are upfront fees paid to lower your interest rate. 1 point = 1% of the loan amount. Each point typically reduces the rate by 0.25%. For example, on a $500,000 loan, buying 1 point costs $5,000 and might reduce your rate from 6% to 5.75%, saving about $80/month.
Are mortgage points worth buying?
Whether points are worth it depends on how long you'll keep the mortgage. Calculate the break-even point: Points Cost ÷ Monthly Savings = Months to recoup. If you plan to stay beyond this period, buying points makes sense. Generally worth considering if you'll hold for 5+ years; not recommended for short-term ownership.
Are mortgage points tax deductible?
In the US, mortgage points may be deductible as mortgage interest on federal taxes, subject to conditions: the loan must be for purchasing or improving your primary residence, points must be customary in your area, and the amount must not exceed typical local averages. Consult a tax professional. This tool shows pre-tax comparisons.
How many points should I buy?
Generally 0-2 points is recommended. Each point reduces the rate by ~0.25%. The optimal number depends on: 1) available cash; 2) planned holding period; 3) current rate environment. This tool lets you compare 'No Points' vs 'Buy Points' scenarios side by side.