See whether buying discount points is worth it — the upfront cost, the monthly savings, and how long until you break even.
One discount point costs 1% of the loan and buys down the rate. Break-even = points cost ÷ monthly savings; if you'll keep the loan (and not refinance) past that point, buying points pays off. Ignores the time value of money and tax deductibility. Not lending advice.
Discount points are prepaid interest — you pay upfront to lower your rate. Whether they pay off comes down to how long you keep the loan: divide the points cost by the monthly savings to find the break-even month. Stay past it and you win; refinance or sell before it and you lose.
Break-even months = points cost ÷ monthly payment savings
1% of the loan amount — $3,000 on a $300,000 loan — and typically lowers the rate by about 0.25%, though it varies by lender.
If you might move or refinance before the break-even month, or if you'd rather keep the cash. Short-horizon borrowers usually skip them.
Related: mortgage payment calculator · refinance calculator · mortgage payoff calculator · all free calculators.
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It uses standard formulas and recalculates the moment you change a value, so the math is exact for the inputs you enter. Treat the result as a reliable planning estimate; for decisions with legal or tax consequences, confirm the figures with a qualified professional.
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Last reviewed: September 2026. Free to use, no signup — Mortgage Points Calculator by ToolWise Digital.
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