Mortgage Points Break-Even Calculator
Months to recoup the cost of buying down your rate.
Calculate how long it takes to break even on paying mortgage points to buy down your interest rate. Enter upfront points cost and see the result instantly.
What this tool does
Enter the upfront points cost and the monthly payment saving. The tool shows how many months to break even and the saving if you stay for the full mortgage.
Enter Values
Formula Used
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Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
Paying points means handing over cash upfront to reduce the rate. One point is typically 1% of the loan. The question is always: how long to recoup that cash in lower payments. A 3,000 point cost that saves 40/month breaks even at 75 months — 6.25 years. If you plan to stay 10 years and not refinance, points win. If you might move at year 5, they lose.
Quick example
With upfront points cost of 3,000 and monthly payment saving of 40 (plus remaining mortgage months of 300), the result is 75 months. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.
Which inputs matter most
You enter Upfront Points Cost, Monthly Payment Saving, and Remaining Mortgage Months. Not every input has equal weight. Flip one at a time toward extreme values to feel which ones move the needle most for your situation.
What's happening under the hood
Break-even month = upfront cost divided by monthly saving. Ignores time value of money — strict payback period. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.
What the headline rate hides
Lenders quote a rate; what you pay is a blend of that rate, fees, insurance, and any early-repayment penalty built into the product. The figure here isolates the core interest cost so you can compare like-for-like across deals — then add the other costs separately before signing anything.
What this doesn't capture
The figure excludes arrangement fees, valuation costs, legal fees, insurance, and any early-repayment charges — those can add several thousand to the headline cost. Rate changes at renewal for fixed-term deals will shift the picture further. Use this for the core interest/principal math and add the other costs on top.
Points break-even produces a month count based on the inputs provided.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
Break-even month = upfront cost divided by monthly saving. Ignores time value of money — strict payback period.
References
Frequently Asked Questions
Are points always worth it?
Is there a tax angle?
Does refinancing reset the clock?
Are points negotiable?
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