Points & Buy-Down Calculator
What a point costs, what it buys, and how long you must stay for it to pay.
Illustrative
One point = 1% of the loan
Of the loan amount
Varies by lender and by day
Selling or refinancing ends it
Net position over time
Below the dashed zero line the points have not paid for themselves yet.
Break-even
5 yr 1 mo
On the holding period you entered, the points pay for themselves.
Reading this honestly
What the numbers above do and do not tell you.
Pricing moves daily
The cost of a point and the rate it buys are set by the market on the day you lock. The defaults here are round numbers for illustration, not a price sheet.
Break-even ignores the cash
Money spent on points is money not spent on the down payment, reserves or the move. A shorter break-even is not automatically the better deal.
Most loans end early
People sell and refinance. If you are not confident of holding past the break-even month, the up-front cost is usually the weaker bet.
What this calculation assumes
- A permanent buy-down: the lower rate lasts for the life of the loan, not a temporary 2-1 arrangement.
- Points are paid in cash at closing rather than financed into the loan.
- The saving is compared on principal and interest only.
- Tax treatment of points is not modelled — that is a question for your tax adviser.
Every rate, fee and premium on this page is illustrative and set by you, not quoted by us. Nothing here is an offer of credit or a commitment to lend.
Every input you change is written into the address of this page, so the link you copy reopens the calculator exactly as you left it.
Are discount points worth buying?
A point is one per cent of the loan paid up front to lower the rate. It pays off only if you hold the loan past the break-even month. Pricing varies by lender, day and file — the point cost and rate reduction here are yours to set, not a quote.
More guides in the learning centerNumbers are a starting point.
Bring yours to a loan officer and we will tell you which parts hold up and which ones move.
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