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📉 Points Break-Even Calculator

Should you pay points to buy down your interest rate? Calculate break-even month, total cost comparison, and which option is cheapest at 3, 5, or 10 years.

📍 Property Address (optional)
InputsYour Numbers
Loan Details
Loan Amount?
$
Loan Term (years)?
Option A: Base Rate (No Points)
Option A Rate %?
%
Option A Points?
%
Option B: Rate Buydown
Option B Rate %?
%
Option B Points?
%
Option C: Max Buydown
Option C Rate %?
%
Option C Points?
%
As-Is AnalysisCurrent
Enter values to see results
Option B Break-Even
--
months to recoup points
Option C Break-Even
--
months to recoup
Best 5-Year Option
--
lowest total cost
Best 10-Year Option
--
lowest total cost
Monthly Payment Comparison
Option A Payment--
Option B Payment--
Option C Payment--
Points Cost
Option A Upfront Cost--
Option B Upfront Cost--
Option C Upfront Cost--
Break-Even Analysis
Option B Monthly Savings vs A--
Option B Break-Even--
Option C Monthly Savings vs A--
Option C Break-Even--
Pro FormaAfter Plan
Enter pro forma values
5-Year Total Cost A
--
payments + points
5-Year Total Cost B
--
payments + points
5-Year Total Cost C
--
payments + points
10-Year Best Option
--
lowest total cost
Total Cost Over Time (payments + points)
Option A (3 years)--
Option B (3 years)--
Option A (5 years)--
Option B (5 years)--

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1
Enter Your Loan Amount
Points cost more on larger loans. 2 points on $280K = $5,600 upfront. On a $150K loan the same rate reduction costs only $3,000.
2
Set Option A as Base
Option A should be the no-points or lowest-points scenario. This is your benchmark -- the rate you get without paying extra upfront.
3
Enter Rate/Points Tradeoffs
Your lender offers a menu: lower rate costs more points. Enter 2-3 options from your lender's rate sheet. Usually each 0.25% rate reduction costs about 1 point.
4
Read the Break-Even Month
Break-even = upfront cost / monthly savings. If buying down from 7.5% to 7.0% costs $5,600 and saves $95/mo, break-even is ~59 months (5 years).
5
Match to Your Hold Period
If you plan to hold (or keep the loan) for 5+ years, paying points makes sense. If you'll refinance or sell in 2-3 years, paying points likely wastes money.
6
Check Total Cost Tables
The pro forma shows total payments plus upfront cost at 3, 5, and 10 years. The lowest total cost tells you which option is actually cheapest for your expected hold period.

Paying mortgage points is trading upfront cash for a lower interest rate. 1 point = 1% of the loan amount. Whether it makes sense depends entirely on how long you keep the loan.


The math is straightforward: upfront cost divided by monthly savings equals months to break even. If break-even is month 48 and you refinance in 36 months, you wasted money. If you hold for 10 years past break-even, you saved significantly.


For investment properties, there's an additional consideration: the upfront points cost is tax-deductible (as mortgage interest, amortized over the loan term). Factor in the after-tax cost when deciding whether to buy down the rate.

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