Mortgage Points Calculator

Calculate the cost and savings of buying mortgage points. See break-even month and total interest savings.

By Konstantin Iakovlev · Updated September 2026 · Source: CFPB — Owning a Home

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%

Cost of Points

$3,000.00

New Rate

6.75%

Monthly Savings

$50.11

Break-Even

60 months

Total Interest Savings

$18,040.75

Net Savings

$15,040.75

Points Analysis

Cost of 1 Point(s)$3,000.00
Original Rate7.00%
Rate Reduction (1 x 0.25%)- 0.25%
New Rate6.75%

Payment Comparison

Old Monthly Payment (7.00%)$1,995.91
New Monthly Payment (6.75%)$1,945.79
Monthly Savings$50.11
Break-Even Period60 months
Total Interest (without points, 30yr)$418,526.69
Total Interest (with points, 30yr)$400,485.94
Total Interest Savings$18,040.75
Net Savings (interest savings - points cost)$15,040.75

Use the Mortgage Points Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.

Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.

How It Works

Buying points means paying interest upfront to shave your rate down, and whether that trade pays off depends entirely on how long you keep the loan. With Freddie Mac's weekly survey putting the average 30-year fixed rate at 6.95% on September 17, 2026, the math can swing by thousands of dollars. The tool surfaces your break-even month and the total interest you stand to save, so the decision rests on numbers rather than a sales pitch.

Two amortization schedules drive the comparison. The calculator works out the monthly principal and interest payment both with points and without, using the standard amortization formula. It tallies the upfront cost of the points and divides that by the monthly savings to find the break-even month, then projects total interest across the full term for each scenario to show what you keep if you hold the loan past that point.

Points are prepaid interest and can be tax-deductible in certain situations, which is worth raising with a tax professional. The trap is fixating on the smaller monthly payment while ignoring your time horizon: sell or refinance before the break-even month arrives and the upfront cost never gets recovered, leaving you behind on the deal.

Example: Buying 1 Point on a $300,000 Mortgage

  1. 1 A homebuyer is looking at a $300,000, 30-year fixed mortgage. Lender A offers 6.75% with no points. Lender B offers 6.50% if the buyer pays 1 point ($3,000 upfront), which matches the calculator's assumption that each point cuts the rate by 0.25 percentage point.
  2. 2 Without points the monthly payment is $1,945.79; at 6.50% it is $1,896.20, so the point saves $49.59 a month.
  3. 3 Break-even: $3,000 / $49.59 = 60.5 months, which the calculator shows as 60 months, about 5 years.
  4. 4 Over the full 30 years, total interest falls from $400,485.94 to $382,633.47, a saving of $17,852.48, or $14,852.48 after the $3,000 cost of the point. That only happens if the buyer keeps the loan well past five years; selling or refinancing before month 61 leaves the point unrecovered.

Source: CFPB — Owning a Home · Last updated: September 2026

Frequently Asked Questions

What are mortgage points and how do they work?
One mortgage point costs 1% of the loan amount and typically lowers your interest rate by 0.25%. On a $300,000 loan, one point costs $3,000 and might reduce your rate from 6.5% to 6.25%, saving about $50/month.
When is buying mortgage points worth it?
Points are worth it if you stay in the home past the break-even point, typically 4-7 years. Divide the cost of points by the monthly savings to find your break-even month. If you plan to sell or refinance before then, skip the points.
Are mortgage points tax deductible?
Yes. Points paid on a purchase mortgage are typically deductible in the year paid. Points on a refinance must be deducted over the life of the loan. You must itemize deductions to claim this benefit.

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