Mortgage Points Calculator
Compare a mortgage offer with discount points against one without them. Enter both lender rates; one point does not imply a fixed rate reduction.
Rule year: 2026 · USD · Sources checked
Upfront discount-points cost
US fixed-rate, fully amortizing loan; points paid upfront; identical principal and term in both offers. No escrow, PMI, taxes, points deductibility, other closing-cost differences, early-sale balance comparison, refinancing forecast or time-value adjustment. Offered rates are supplied, not predicted.
For informational purposes only. This estimate is not financial advice, a tax return, a payroll calculation or a lender decision. See the supported circumstances and exclusions below.
How this calculator works
One discount point costs 1% of mortgage principal. A lender’s rate reduction for that cost varies, so this calculator uses two actual offered rates. Both scenarios amortize the same fixed principal over the same term. Dividing the upfront points cost by the monthly principal-and-interest reduction gives a simple payment break-even. Full-term interest comparison answers a separate question. Early sale or refinancing changes the comparison because remaining balances and time value also matter.
Formula and rules
Points cost = principal × points / 100. Monthly reduction = payment without points − payment with points. Simple break-even months = points cost / positive monthly reduction.
Assumptions and limitations
US fixed-rate, fully amortizing loan; points paid upfront; identical principal and term in both offers. No escrow, PMI, taxes, points deductibility, other closing-cost differences, early-sale balance comparison, refinancing forecast or time-value adjustment. Offered rates are supplied, not predicted.
Worked example
One point on a $300,000 mortgage costs $3,000 upfront. With both offered rates set to 6%, payments are identical and there is no payment break-even; the points add cost without reducing interest.
- Upfront discount-points cost
- $3,000.00
- Monthly principal-and-interest reduction
- $0.00
- Simple payment break-even
- No payment break-even at entered rates
- Full-term interest reduction before points cost
- $0.00
Official sources and review
Reviewed against the sources below on 2026-10-06. Rates are held in versioned rule modules. Versioned rules, official source review and year-specific calculation tests.
- CFPB: discount points and lender credits ↗
One discount point costs 1% of loan amount; lender rate reduction must be entered, not assumed.
- CFPB: Debt-to-income ratio ↗
DTI compares monthly debt payments with gross monthly income; lending requirements vary.
Common questions
Does one point reduce the rate by 0.25%?
There is no universal reduction. Enter the specific rate the lender offers with and without the points.
Is simple break-even enough for an early sale?
No. It compares payment savings only. A fuller early-sale analysis also considers remaining balances, other costs and the value of cash.
Does this estimate a tax deduction for points?
No. Federal deductibility can depend on the transaction and eligibility conditions and is outside this comparison.