{"id":379,"date":"2015-06-10T09:43:29","date_gmt":"2015-06-10T07:43:29","guid":{"rendered":"http:\/\/wpcalc.com\/?p=379"},"modified":"2026-09-30T19:55:31","modified_gmt":"2026-09-30T16:55:31","slug":"mortgage-discountbuying-points","status":"publish","type":"post","link":"https:\/\/wpcalc.com\/en\/finance\/mortgage-discountbuying-points\/","title":{"rendered":"Mortgage Discount Points Calculator"},"content":{"rendered":"<section class=\"not-prose calculator-box\" aria-labelledby=\"calculator-title\"><div class=\"flex items-baseline sm:items-center justify-between gap-2 sm:gap-3\"><div class=\"flex flex-col sm:flex-row sm:items-center gap-2\"><span class=\"icon icon-calculator text-primary-700! text-base! dark:text-primary-300!\" aria-hidden=\"true\"><\/span><h2 id=\"calculator-title\" class=\"text-lg font-display font-bold\">Buying Mortgage Points Cost and Savings Calculator<\/h2><\/div><div class=\"calcdash-favorite group\">\n  <button type=\"button\" class=\"favorite\" id=\"favorite\" data-favorite-id=\"379\" data-favorite-title=\"Mortgage Discount Points (Buying Points)\" data-favorite-url=\"https:\/\/wpcalc.com\/en\/finance\/mortgage-discountbuying-points\/\" data-favorite-excerpt=\"Estimate the cost of buying mortgage discount points, the monthly savings from a lower rate, and how many months it takes to break even. Enter loan amount, term, both rates, and points.\" aria-label=\"Add to Favorites\" data-favorite-icon=\"icon icon-loan\">\n    <span class=\"icon icon-shape-star-empty\" aria-hidden=\"true\"><\/span>\n  <\/button>\n  <div class=\"calcdash-favorite__tip\" aria-hidden=\"true\">\n   <span class=\"favorite-tooltip\" id=\"favorite-tooltip\"><\/span>\n  <\/div>\n  <span class=\"sr-only\" role=\"status\" id=\"favorite-status\"><\/span>\n<\/div><\/div><form action=\"https:\/\/wpcalc.com\/en\/finance\/mortgage-discountbuying-points\/\" method=\"POST\" class=\"calculator\" id=\"calculator-379\" data-post=\"379\"><fieldset class=\"fieldset-input\"><legend class=\"sr-only\">Input Fields<\/legend><div class=\"field\" id=\"input-1\"><label for=\"field-1\">Loan Amount<\/label><input type=\"text\" name=\"loan_amount\" id=\"field-1\" aria-describedby=\"calc-unit-1 calc-info-1\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" value=\"300000\"\/><div class=\"unit\" id=\"calc-unit-1\">$<\/div><small id=\"calc-info-1\">Enter the loan amount<\/small><\/div><div class=\"field\" id=\"input-2\"><label for=\"field-2\">Loan Term (Years)<\/label><input type=\"text\" name=\"loan_term_years\" id=\"field-2\" aria-describedby=\"calc-unit-2 calc-info-2\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"1\" value=\"30\"\/><div class=\"unit\" id=\"calc-unit-2\">years<\/div><small id=\"calc-info-2\">Enter the loan term<\/small><\/div><div class=\"field\" id=\"input-3\"><label for=\"field-3\">Interest Rate With Points<\/label><input type=\"text\" name=\"interest_rate_with_points\" id=\"field-3\" aria-describedby=\"calc-unit-3 calc-info-3\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" max=\"100\" value=\"4\"\/><div class=\"unit\" id=\"calc-unit-3\">%<\/div><small id=\"calc-info-3\">Enter the interest rate after buying points<\/small><\/div><div class=\"field\" id=\"input-4\"><label for=\"field-4\">Discount Points (%)<\/label><input type=\"text\" name=\"discount_points_\" id=\"field-4\" aria-describedby=\"calc-unit-4 calc-info-4\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" max=\"5\" value=\"1\"\/><div class=\"unit\" id=\"calc-unit-4\">%<\/div><small id=\"calc-info-4\">Enter the number of discount points purchased<\/small><\/div><div class=\"field\" id=\"input-5\"><label for=\"field-5\">Years in Home<\/label><input type=\"text\" name=\"years_in_home\" id=\"field-5\" aria-describedby=\"calc-unit-5 calc-info-5\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"1\" value=\"7\"\/><div class=\"unit\" id=\"calc-unit-5\">years<\/div><small id=\"calc-info-5\">Expected number of years in home<\/small><\/div><div class=\"field\" id=\"input-6\"><label for=\"field-6\">Interest Rate Without Points<\/label><input type=\"text\" name=\"interest_rate_without_points\" id=\"field-6\" aria-describedby=\"calc-unit-6 calc-info-6\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" max=\"100\" value=\"4.5\"\/><div class=\"unit\" id=\"calc-unit-6\">%<\/div><small id=\"calc-info-6\">Enter the interest rate without buying points<\/small><\/div><\/fieldset><div class=\"buttons\"><button type=\"submit\" data-text=\"Re-Calculate\" id=\"calculate-button\" data-post=\"379\">Calculate<\/button><button type=\"reset\">Reset<\/button><\/div><div class=\"field is-checkbox hidden!\" id=\"field-auto-calc\"><input type=\"checkbox\" id=\"auto-calc\"><label for=\"auto-calc\">Calculate automatically<\/label><small>If enabled, the result will update automatically when you change any value.<\/small><\/div><div class=\"fieldset-result is-hidden\" aria-labelledby=\"result-title\" aria-live=\"polite\" role=\"region\"> <h3 class=\"result-title bg-gradient-to-r from-primary-50 to-gray-50 dark:from-primary-900 dark:to-gray-800\" id=\"result-title\"><span class=\"icon icon-s-pulse\" aria-hidden=\"true\"><\/span> Your Results<\/h3><div class=\"result-box\"><div class=\"field-result\" id=\"output-1\"><span class=\"field-title\"><span>Monthly Payment With Points<\/span><\/span><span class=\"field-value\" id=\"result-1\" data-unit=\"$\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><div class=\"field-result\" id=\"output-2\"><span class=\"field-title\"><span>Fee Paid for Points<\/span><\/span><span class=\"field-value\" id=\"result-2\" data-unit=\"$\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><div class=\"field-result\" id=\"output-3\"><span class=\"field-title\"><span>Monthly Payment Without Points<\/span><\/span><span class=\"field-value\" id=\"result-3\" data-unit=\"$\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><div class=\"field-result\" id=\"output-4\"><span class=\"field-title\"><span>Monthly Saving<\/span><\/span><span class=\"field-value\" id=\"result-4\" data-unit=\"$\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><div class=\"field-result\" id=\"output-5\"><span class=\"field-title\"><span>Break-even Time<\/span><\/span><span class=\"field-value\" id=\"result-5\" data-unit=\"months\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><\/div><div class=\"result-actions\"><button type=\"button\" class=\"copy-link\"><svg viewBox=\"0 0 20 20\" fill=\"currentColor\" aria-hidden=\"true\"><path d=\"M12.232 4.232a2.5 2.5 0 0 1 3.536 3.536l-1.225 1.224a.75.75 0 0 0 1.061 1.06l1.224-1.224a4 4 0 0 0-5.656-5.656l-3 3a4 4 0 0 0 .225 5.865.75.75 0 0 0 .977-1.138 2.5 2.5 0 0 1-.142-3.667l3-3Z\"\/><path d=\"M11.603 7.963a.75.75 0 0 0-.977 1.138 2.5 2.5 0 0 1 .142 3.667l-3 3a2.5 2.5 0 0 1-3.536-3.536l1.225-1.224a.75.75 0 0 0-1.061-1.06l-1.224 1.224a4 4 0 1 0 5.656 5.656l3-3a4 4 0 0 0-.225-5.865Z\"\/><\/svg><span class=\"copy-link__text\">Copy link to this calculation<\/span><\/button><span class=\"sr-only\" role=\"status\" id=\"copy-link-status\"><\/span><\/div><\/div><a href=\"#respond\" class=\"hidden transition-opacity duration-300 opacity-0 w-50 text-sm justify-center items-center gap-2 px-4 py-2 rounded bg-gray-200 text-gray-700 hover:bg-gray-300\" id=\"leave-comment\"><span class=\"icon icon-comments\" aria-hidden=\"true\"><\/span>Leave a Comment<\/a><\/form><\/section><section id=\"calc-reactions\" class=\"not-prose hidden my-12 bg-gradient-to-r from-primary-50 to-gray-50 border border-indigo-100 rounded-xl px-6 py-4 shadow-sm\" data-post=\"379\" aria-live=\"polite\" aria-labelledby=\"calc-reactions-title\"><p id=\"calc-reactions-title\" class=\"text-sm text-gray-500 text-center mb-2\">How did this result make you feel?<\/p><div role=\"group\" aria-labelledby=\"calc-reactions-title\" class=\"grid grid-cols-3 sm:flex sm:flex-row sm:justify-around gap-4 sm:items-center sm:flex-wrap\"><button type=\"button\" aria-pressed=\"false\" class=\"reaction-btn flex flex-col items-center gap-1 text-sm text-gray-700 hover:text-primary-600 cursor-pointer transition-transform hover:scale-105\" data-reaction=\"like\"><span class=\"reaction-count\" data-reaction-count=\"like\">0<\/span><span class=\"reaction text-3xl\" aria-hidden=\"true\">\ud83d\ude00 <\/span><span class=\"reaction-description font-medium\">Like <\/span><\/button><button type=\"button\" aria-pressed=\"false\" class=\"reaction-btn flex flex-col items-center gap-1 text-sm text-gray-700 hover:text-primary-600 cursor-pointer transition-transform hover:scale-105\" data-reaction=\"helpful\"><span class=\"reaction-count\" data-reaction-count=\"helpful\">0<\/span><span class=\"reaction text-3xl\" aria-hidden=\"true\">\ud83d\udca1 <\/span><span class=\"reaction-description font-medium\">Helpful <\/span><\/button><button type=\"button\" aria-pressed=\"false\" class=\"reaction-btn flex flex-col items-center gap-1 text-sm text-gray-700 hover:text-primary-600 cursor-pointer transition-transform hover:scale-105\" data-reaction=\"confused\"><span class=\"reaction-count\" data-reaction-count=\"confused\">0<\/span><span class=\"reaction text-3xl\" aria-hidden=\"true\">\ud83d\ude15 <\/span><span class=\"reaction-description font-medium\">Confused <\/span><\/button><button type=\"button\" aria-pressed=\"false\" class=\"reaction-btn flex flex-col items-center gap-1 text-sm text-gray-700 hover:text-primary-600 cursor-pointer transition-transform hover:scale-105\" data-reaction=\"disappointed\"><span class=\"reaction-count\" data-reaction-count=\"disappointed\">0<\/span><span class=\"reaction text-3xl\" aria-hidden=\"true\">\ud83d\ude1e <\/span><span class=\"reaction-description font-medium\">Disappointed <\/span><\/button><button type=\"button\" aria-pressed=\"false\" class=\"reaction-btn flex flex-col items-center gap-1 text-sm text-gray-700 hover:text-primary-600 cursor-pointer transition-transform hover:scale-105\" data-reaction=\"inaccurate\"><span class=\"reaction-count\" data-reaction-count=\"inaccurate\">0<\/span><span class=\"reaction text-3xl\" aria-hidden=\"true\">\u274c <\/span><span class=\"reaction-description font-medium\">Inaccurate <\/span><\/button><\/div><div id=\"reaction-message\" class=\"hidden mt-8 rounded-md border border-primary-100 bg-white\/50 backdrop-blur-sm px-4 py-2 text-sm text-center shadow-sm\"><\/div><\/section><div class=\"calcdash-ad not-prose calcdash-ad--calc_result calcdash-ad--in-article\"><ins class=\"adsbygoogle\" style=\"display:block\" data-ad-client=\"ca-pub-1721569815777345\" data-ad-slot=\"6317458308\" data-ad-layout=\"in-article\" data-ad-format=\"fluid\"><\/ins><script>(adsbygoogle = window.adsbygoogle || []).push({});<\/script><\/div>\n<style id=\"wpcoderpro-inline-1\">.formula-box {\r\n\tborder-bottom: none !important;\r\n}<\/style><section class=\"formula-box\" aria-labelledby=\"formula-title\">\r\n\t<div id=\"formula-title\" class=\"not-prose font-display mb-4\"><span class=\"icon icon-formula\" aria-hidden=\"true\"><\/span><h2>Mortgage Discount Points Formula<\/h2><\/div>\r\n\t<figure class=\"not-prose formula\">\r\n\t\t<figcaption class=\"formula-title\">Formula<\/figcaption>\r\n\t\t<div class=\"text-base text-gray-800\" id=\"formula\">\n\\[ M = \\frac{P \\times r}{1 - (1 + r)^{-n}} \\\\ \\text{Fee for Points} = P \\times \\frac{d}{100} \\\\ S = M_{\\text{without}} - M_{\\text{with}} \\\\ T = \\frac{\\text{Fee for Points}}{S} \\]\n<\/div>\r\n\t<\/figure>\r\n\t<\/p>\n<p><strong>Where:<\/strong><\/p>\n<ul>\n<li>\\(P\\) \u2014 loan principal (amount borrowed)<\/li>\n<li>\\(r\\) \u2014 monthly interest rate (annual rate divided by 12)<\/li>\n<li>\\(n\\) \u2014 total number of monthly payments (loan term in months)<\/li>\n<li>\\(d\\) \u2014 discount points purchased, as a percentage of the loan amount<\/li>\n<li>\\(M\\) \u2014 monthly payment (calculated for both the rate with points and the rate without points)<\/li>\n<li>\\(S\\) \u2014 monthly saving from the lower rate<\/li>\n<li>\\(T\\) \u2014 break-even time in months<\/li>\n<\/ul>\n<p>The first formula is the standard amortizing-loan payment formula, applied once at the rate with points and once at the rate without points. The break-even time tells you how long you must keep the loan before the monthly savings have repaid the upfront cost of the points.<\/p>\n<p>\r\n<\/section>\n<style id=\"wpcoderpro-inline-459\">.calculation-box {\r\n\tborder-bottom: none !important;\r\n}<\/style><section id=\"calculation\" class=\"calculation-box\" aria-labelledby=\"calculation-title\">\r\n\t<div id=\"calculation-title\" class=\"not-prose font-display\"><span class=\"icon icon-unordered-list\" aria-hidden=\"true\"><\/span><h2>Mortgage Discount Points \u2013 Calculation Example<\/h2><\/div>\r\n\r\n<\/p>\n<p><strong>Example:<\/strong> you borrow \\(\\$300{,}000\\) for 30 years. The lender offers a rate of 4.5% with no points, or 4.0% if you buy 1 discount point. You expect to stay in the home for 7 years.<\/p>\n<p>\\[ \\text{Fee for Points} = 300{,}000 \\times \\frac{1}{100} = \\$3{,}000 \\]<\/p>\n<p>\\[ M_{\\text{with}} = \\frac{300{,}000 \\times 0.04\/12}{1 - (1 + 0.04\/12)^{-360}} \\approx \\$1{,}432.25 \\]<\/p>\n<p>\\[ M_{\\text{without}} = \\frac{300{,}000 \\times 0.045\/12}{1 - (1 + 0.045\/12)^{-360}} \\approx \\$1{,}520.06 \\]<\/p>\n<p>\\[ S = 1{,}520.06 - 1{,}432.25 = \\$87.81 \\quad\\Rightarrow\\quad T = \\frac{3{,}000}{87.81} \\approx 34.2 \\text{ months} \\]<\/p>\n<p><strong>Result:<\/strong> the point costs \\($3,000\\) upfront, saves \\($87.81\\) per month, and breaks even after about 34.2 months (roughly 2 years and 10 months). Over the planned 7 years (84 months), the total savings are about \\($7,376\\) \u2014 a net gain of roughly \\($4,376\\) after the cost of the point.<\/p>\n<p>\n\r\n<\/section>\n<h2>How to Use the Calculator<\/h2>\n<ol>\n<li>Enter the <strong>Loan Amount<\/strong> \u2014 the principal you are borrowing, not the home price.<\/li>\n<li>Enter the <strong>Loan Term (Years)<\/strong>, typically 15, 20, or 30 years.<\/li>\n<li>Enter the <strong>Interest Rate With Points<\/strong> \u2014 the lower rate the lender offers if you buy points.<\/li>\n<li>Enter the <strong>Discount Points (%)<\/strong> \u2014 each point equals 1% of the loan amount. Enter 1 for one point, 1.5 for one and a half.<\/li>\n<li>Enter the <strong>Years in Home<\/strong> \u2014 how long you realistically expect to keep this mortgage before selling or refinancing.<\/li>\n<li>Enter the <strong>Interest Rate Without Points<\/strong> \u2014 the rate you would pay if you bought no points.<\/li>\n<li>Read the results: <strong>Monthly Payment With Points<\/strong>, <strong>Fee Paid for Points<\/strong>, <strong>Monthly Payment Without Points<\/strong>, <strong>Monthly Saving<\/strong>, and <strong>Break-even Time<\/strong> in months.<\/li>\n<\/ol>\n<h2>What Are Mortgage Discount Points?<\/h2>\n<p>Discount points are an upfront fee paid to a lender in exchange for a lower interest rate \u2014 a practice often called \"buying down the rate.\" One point costs 1% of the loan amount, so on a \\($300,000\\) mortgage, one point costs \\($3,000\\). Each point typically lowers the rate by somewhere between 0.125% and 0.5%, depending on the lender and market conditions, so always ask for your lender's exact rate sheet.<\/p>\n<p>Buying points is essentially a trade-off: you pay more at closing to pay less each month. The calculator quantifies both sides of that trade. It shows the upfront fee, the two monthly payments, the monthly saving, and \u2014 most importantly \u2014 the break-even time, which is the number of months of savings needed to recover the upfront cost.<\/p>\n<p>Interpreting the result is straightforward: if the break-even time is shorter than the number of months you expect to keep the loan (your <em>Years in Home<\/em> times 12), buying points comes out ahead. If you might sell, refinance, or pay off the loan before the break-even point, the points are a losing bet because the upfront fee is sunk at closing.<\/p>\n<p>Because points reduce the interest rate on the entire loan, the longer you keep the mortgage, the more valuable they become. For a fuller picture of the payments themselves, run the same numbers through our <a href=\"https:\/\/wpcalc.com\/en\/finance\/mortgage-calculator\/\">Mortgage Calculator<\/a> or the <a href=\"https:\/\/wpcalc.com\/en\/finance\/mortgage-payment\/\">Mortgage Payment Calculator<\/a>. Points also affect the loan's effective cost over time, which is captured in the <a href=\"https:\/\/wpcalc.com\/en\/finance\/mortgage-apr\/\">Mortgage APR Calculator<\/a>.<\/p>\n<h2>Limitations and Practical Tips<\/h2>\n<ul>\n<li><strong>The break-even ignores opportunity cost.<\/strong> The \\($3,000\\) spent on points could otherwise be invested or used for a larger down payment. If you want to weigh the alternative, compare against the <a href=\"https:\/\/wpcalc.com\/en\/finance\/return-on-investment\/\">Return on Investment Calculator<\/a>.<\/li>\n<li><strong>Monthly savings are not perfectly constant.<\/strong> The calculator uses the first month's payment difference for the whole term. In reality the difference shifts slightly over time because the two loans amortize at different speeds; the effect on break-even is small.<\/li>\n<li><strong>Points do not always reduce the rate by the same amount.<\/strong> The rate reduction per point varies by lender, loan type, and market. Get both rates (with and without points) in writing from your lender before running the numbers.<\/li>\n<li><strong>Discount points are not the same as the origination fee.<\/strong> Some lenders charge an origination fee quoted in \"points\" for processing the loan; only true discount points buy the rate down.<\/li>\n<li><strong>Points may be tax-deductible<\/strong> in some jurisdictions as prepaid mortgage interest. Consult a tax professional, since rules depend on how the loan is used and where you live.<\/li>\n<li><strong>Cash at closing matters.<\/strong> Even when points are mathematically worthwhile, you need the liquidity to pay them. A point paid from savings you might need later can be riskier than a slightly higher rate.<\/li>\n<li><strong>Refinancing resets the clock.<\/strong> If you are likely to refinance soon \u2014 for example, because rates are expected to fall \u2014 the points on the current loan may never break even.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Estimate the cost of buying mortgage discount points, the monthly savings from a lower rate, and how many months it takes to break even. Enter loan amount, term, both rates, and points.<\/p>\n","protected":false},"author":70,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5],"tags":[30],"class_list":["post-379","post","type-post","status-publish","format-standard","hentry","category-finance","tag-mortgage"],"acf":[],"_links":{"self":[{"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/posts\/379","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/users\/70"}],"replies":[{"embeddable":true,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/comments?post=379"}],"version-history":[{"count":3,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/posts\/379\/revisions"}],"predecessor-version":[{"id":66138,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/posts\/379\/revisions\/66138"}],"wp:attachment":[{"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/media?parent=379"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/categories?post=379"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/tags?post=379"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}