Mortgage Points Calculator: Estimate Your Cash Savings
Mortgage points calculator: side-by-side check of cash-paid points on your rate quote, with span savings, payback if reachable and whole-loan net gain.
What This Calculator Does
Span cash savings and full-term interest savings come out as separate results. Enter two fixed-rate loans with equal principal and term: case A has no points, case B has a cash-paid bundle at the rate you type, not a standard cut per point.
Who Is This For
If you're weighing U.S. points quotes in dollars, make sure they share principal and amortization term. Nothing else about their cost may differ.
How It Works
You fill in all six inputs yourself; the tool fills in none. Among them are the rate on the points bundle and how long you want to review, counted in whole months. Make sure the points are paid in cash, and that other costs are identical in both loans or left out. Then check the counted payments, the recovery status and both full-term savings before you rely on the output.
Frequently Asked Questions
How much does one discount point cost?
A point is priced at 1% of what you borrow, and rounding to the cent comes after that, so 2 points on a $400,000 loan means $8,000 due in cash. What a point costs says nothing about how far it lowers your rate, which is why you should type in the rate quoted for that exact bundle. The 0–4 range is there to keep the math working; no law sets it.
Should I expect my rate to fall 0.25 percentage points per point?
No, and the calculator doesn't assume it. Lenders may price each bundle differently, so your quoted rate is a required input. Say a quote takes you from 6.5% to 6%: that's 0.5 percentage points, a different thing from a 0.5% relative cut. Treat those numbers as illustration, not today's offers. With 0 points, the quoted rate must equal the base rate.
Can I roll the cost of the points into my loan?
Not in this calculator. You pay the points out of pocket, so the principal never moves. The fee is principal × points ÷ 100, rounded to cents in a single step, with a half cent going up. Finance the fee and the principal and payments change, which means you'd need another matching comparison.
If I sell early, do the savings for my chosen period show the interest I saved?
No. It adds up the gap between the two loans' monthly principal-and-interest payments across your span. For the net, subtract the cash cost of the points from that total. The balances still owed at the end may not match, so the total isn't interest saved. Equity, sale proceeds, taxes, early payoff, refinancing costs and the time value of money are all left out.
When do points break even?
You've earned the points back in the first month where the running total of savings catches up with their price, and it has to be a month the loan schedule actually contains. Run $400,000 over 30 years with 2 points, 6.5% against 6%, and that happens in month 62. Stop at 60 months, and you're still about −$195.80 after the $8,000. Earning the cost back is not profit yet.
My payment is lower, so why is there no break-even month?
The loan can end before the savings catch up with the fee. Compare 6.5% with 6.375% on a hypothetical ten-year, $400,000 loan with 1 point: the monthly gain is about $25.40. Over 120 payments that adds up to $3,047.88, which never reaches the $4,000 fee. Month 158 can't be reached on that loan. Separately, a case with no cash fee carries its own status. And recovery 0 means there was nothing to recoup, not an instant profit.
How does the calculator treat a review span longer than the loan term?
Enter 600 months on a ten-year loan and you still get 120 payments, since nothing is counted beyond the scheduled payoff. The full-term interest savings use every scheduled payment, before any points cost comes in. A separate full-term net takes the cash charge for points off a single time. If a rounded zero shows up, don't read it as proof the numbers are exactly equal.
Where does the calculator stop, and what should I check elsewhere?
Some costs sit outside the math: lender credits, escrow, other loan fees and mortgage insurance that differs between quotes. Keep them equal in both cases or exclude them explicitly. If they don't match, compare the loans as quoted. The result is not the total loan cost or the APR. It doesn't approve you, check tax-deductibility or guarantee a return. Weigh real quotes and your plans for paying early separately.