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Mortgage Discount Points Calculator

This Mortgage Discount Points Calculator helps you estimate the cost of buying discount points, how much you can save monthly, and the break-even point for recouping your upfront investment.

Buying Mortgage Points Cost and Savings Calculator

Input Fields
$
Enter the loan amount
years
Enter the loan term
%
Enter the interest rate after buying points
%
Enter the number of discount points purchased
years
Expected number of years in home
%
Enter the interest rate without buying points

Mortgage Discount Points Formulas

Formula
\[ \text{Monthly Payment} = \frac{P \times r}{1 – (1 + r)^{-n}} \] \[ \text{Fee for Points} = P \times \frac{\text{Discount Points}}{100} \] \[ \text{Monthly Saving} = \text{Monthly Payment Without Points} – \text{Monthly Payment With Points} \] \[ \text{Break-even Months} = \frac{\text{Fee for Points}}{\text{Monthly Saving}} \]

Where:

  • $$P$$ = Loan principal (amount borrowed)
  • $$r$$ = Monthly interest rate (after buying points, if applicable)
  • $$n$$ = Total number of monthly payments
  • $$Discount Points$$ = Percentage of the loan paid upfront to lower the interest rate
  • $$Monthly Payment Without Points$$ = Monthly payment based on original interest rate
  • $$Monthly Payment With Points$$ = Monthly payment after buying points
  • $$Fee for Points$$ = Cost paid upfront for buying discount points
  • $$Monthly Saving$$ = Reduction in monthly payment due to lower rate
  • $$Break-even Months$$ = Time needed to recover the upfront cost of discount points


The Mortgage Discount Points Calculator helps homebuyers determine whether purchasing discount points is a financially beneficial strategy. It calculates the cost, monthly savings, and how many months it will take to break even, assisting in making smarter mortgage decisions.

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