{
  "id": "mortgage-points",
  "version": "c5257f8be5c7",
  "status": "published",
  "name": "Mortgage Points Calculator",
  "question": "Are mortgage points worth it for me?",
  "summary": "Computes what mortgage discount points cost, the monthly payment with and without them, the monthly saving, the months to break even, and the net saving over the years you keep the loan.",
  "category": "finance",
  "subcategory": "mortgage-and-real-estate",
  "url": "https://www.acalculator.org/finance/mortgage-points-calculator",
  "markdown": "https://www.acalculator.org/finance/mortgage-points-calculator.md",
  "kind": "function",
  "method": "Cost = loan × points ÷ 100; payment = P·r ÷ (1 − (1 + r)^−n) with r = rate ÷ 12 and n = years × 12; saving = payment without points − payment with points; break-even = cost ÷ saving, rounded up; net = saving × 12 × years kept − cost.",
  "assumptions": [
    "One point costs 1% of the loan amount (CFPB).",
    "Fixed-rate loan with monthly payments; both rates are the ones your lender quotes you (type them).",
    "The comparison uses monthly payments only: no interest on the cash you pay for the points, no taxes."
  ],
  "inputs": {
    "$schema": "https://json-schema.org/draft/2020-12/schema",
    "type": "object",
    "properties": {
      "amount": {
        "title": "Loan amount",
        "description": "The amount you borrow.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 1000,
        "maximum": 100000000
      },
      "term": {
        "title": "Loan term (years)",
        "description": "The length of the loan in years, paid monthly.",
        "type": "integer",
        "minimum": 1,
        "maximum": 40
      },
      "rate": {
        "title": "Rate with no points",
        "description": "The yearly interest rate your lender offers with zero points.",
        "type": "number",
        "x-unit": "percent",
        "minimum": 0,
        "maximum": 30
      },
      "points": {
        "title": "Points to buy",
        "description": "How many discount points: 1 point costs 1% of the loan amount. Fractions such as 0.375 are fine.",
        "type": "number",
        "minimum": 0,
        "maximum": 10
      },
      "lower": {
        "title": "Rate with the points",
        "description": "The yearly rate the lender offers if you buy those points. It must be lower than the rate with no points.",
        "type": "number",
        "x-unit": "percent",
        "minimum": 0,
        "maximum": 30
      },
      "keep": {
        "title": "Years you keep the loan",
        "description": "How long you expect to keep the loan before you sell or refinance.",
        "type": "integer",
        "minimum": 1,
        "maximum": 40
      }
    }
  },
  "outputs": {
    "breakEven": {
      "label": "Months to break even",
      "description": "Cost of the points ÷ the monthly saving, rounded up to a whole month.",
      "format": "integer"
    },
    "cost": {
      "label": "Cost of the points",
      "description": "Loan amount × points ÷ 100.",
      "format": "money"
    },
    "payment": {
      "label": "Monthly payment, no points",
      "description": "Principal and interest at the rate with no points.",
      "format": "money"
    },
    "paymentPoints": {
      "label": "Monthly payment with points",
      "description": "Principal and interest at the rate with the points.",
      "format": "money"
    },
    "saving": {
      "label": "Monthly saving",
      "description": "The payment with no points − the payment with points.",
      "format": "money"
    },
    "net": {
      "label": "Net saving over the years you keep it",
      "description": "Monthly saving × 12 × years kept − cost of the points.",
      "format": "money"
    },
    "years": {
      "label": "Years to break even",
      "description": "Months to break even ÷ 12.",
      "format": "number"
    },
    "verdict": {
      "label": "Worth it?",
      "description": "Whether you keep the loan past the break-even month.",
      "format": "text"
    }
  },
  "defaultAnswer": {
    "inputs": {
      "amount": 300000,
      "term": 30,
      "rate": 7,
      "points": 1,
      "lower": 6.75,
      "keep": 10
    },
    "outputs": {
      "breakEven": 60,
      "cost": 3000,
      "payment": 1995.9074855375497,
      "paymentPoints": 1945.7942897046455,
      "saving": 50.11319583290424,
      "net": 3013.5834999485087,
      "years": 5,
      "verdict": "Yes, if you keep the loan at least 60 months."
    },
    "text": "The points cost $3,000.00 and save $50.11 a month, so they pay for themselves after 60 months."
  },
  "examples": [
    {
      "given": {
        "amount": 300000,
        "term": 30,
        "rate": 7,
        "points": 1,
        "lower": 6.75,
        "keep": 10
      },
      "expect": {
        "cost": 3000,
        "payment": 1995.907485537547,
        "paymentPoints": 1945.7942897046466,
        "breakEven": 60
      },
      "source": "CFPB, How should I use lender credits and points? (one point equals one percent of the loan amount), https://www.consumerfinance.gov/ask-cfpb/what-are-discount-points-and-lender-credits-and-how-do-they-work-en-136/; amortized payment P·r ÷ (1 − (1 + r)^−n); hand calculation in content.mdx: $1,995.91 − $1,945.79 = $50.11 a month; $3,000 ÷ $50.11 = 59.9, so 60 months",
      "tolerance": 1e-9
    },
    {
      "given": {
        "amount": 100000,
        "term": 30,
        "rate": 6,
        "points": 1.375,
        "lower": 5.75,
        "keep": 5
      },
      "expect": {
        "cost": 1375,
        "breakEven": 87
      },
      "source": "CFPB, How should I use lender credits and points? (1.375 points on a $100,000 loan is $1,375), https://www.consumerfinance.gov/ask-cfpb/what-are-discount-points-and-lender-credits-and-how-do-they-work-en-136/; hand calculation in content.mdx: $599.55 − $583.57 = $15.98 a month; 1,375 ÷ 15.98 = 86.06, so 87 months"
    },
    {
      "given": {
        "amount": 200000,
        "term": 15,
        "rate": 0.5,
        "points": 0.5,
        "lower": 0,
        "keep": 15
      },
      "expect": {
        "cost": 1000,
        "paymentPoints": 1111.111111111111,
        "payment": 1153.5299192527605,
        "breakEven": 24
      },
      "source": "CFPB, How should I use lender credits and points? (0.5 points on $100,000 is $500, so on $200,000 it is $1,000), https://www.consumerfinance.gov/ask-cfpb/what-are-discount-points-and-lender-credits-and-how-do-they-work-en-136/; hand calculation in content.mdx: 200,000 ÷ 180 = 1,111.11; $1,153.53 − $1,111.11 = $42.42; 1,000 ÷ 42.42 = 23.6, so 24 months"
    }
  ],
  "sources": [
    "Consumer Financial Protection Bureau (CFPB), How should I use lender credits and points (also called discount points)? (one point equals one percent of the loan amount; one point on $100,000 is $1,000; 1.375 points is $1,375, 0.5 points $500, 0.125 points $125; paying points lowers your interest rate compared with a zero-point loan at the same lender). https://www.consumerfinance.gov/ask-cfpb/what-are-discount-points-and-lender-credits-and-how-do-they-work-en-136/ (retrieved 2026-10-02)"
  ],
  "related": [
    "mortgage",
    "refinance",
    "amortization",
    "closing-cost"
  ],
  "changelog": []
}