Mortgage Points Calculator
This mortgage points calculator shows what discount points cost and how long they take to pay for themselves at your rate.
By Onias Derilus, Mortgage Capital · NMLS# 1859012 · Last Updated: June 2026
One point equals 1% of the loan amount. How much a point lowers the rate varies by lender and day — ask for the actual buydown grid rather than assuming a quarter point. Estimate only.
A discount point is 1% of the loan paid up front to lower the rate. Whether it is worth buying comes down to one question: will you hold the loan past the break-even month.
The amount of rate a point buys is not fixed. It moves with the market and differs between lenders, so the only reliable input is the buydown grid on your actual quote.
These figures are estimates. For neutral, official guidance on mortgage costs and what lenders can charge, see the CFPB's Owning a Home guide.
How to Use This Calculator
- 1
Enter the loan amount and the rate you are quoted without points.
- 2
Enter how many points you are considering.
- 3
Enter the rate reduction those points actually buy, from the lender\u2019s quote.
- 4
Read the break-even month, then compare it against how long you realistically expect to keep the loan.
The Formula & Assumptions
Cost = loan × points%
Savings = payment at base
rate − payment at
reduced rate
Break-even = cost ÷
monthly savings
Break-even ignores what the same cash would earn elsewhere and any tax treatment of prepaid interest. Both can move the decision at the margin, and points may be deductible in the year paid on a purchase — worth asking a tax professional about.
If you expect to refinance or sell before break-even, points lose money. Given how often Florida borrowers refinance after a rate move, a break-even beyond about five years deserves real scrutiny.
A seller-paid or builder-paid buydown changes the calculation entirely, because someone else covers the cost. In that case the question is whether the concession is better spent on points or on price.
Frequently Asked Questions
How much does one point lower the rate?
Often around a quarter point, but it varies daily and by lender, and the relationship is not linear — the second point usually buys less than the first. Always price it from the lender\u2019s actual buydown grid.
When are points worth buying?
When you will hold the loan comfortably past break-even, typically meaning you plan to stay and not refinance for well beyond that month. Short holds and likely refinances argue against paying points.
Are discount points tax deductible?
Points paid to lower the rate on a purchase of a primary residence are often deductible in the year paid, and points on a refinance are usually amortized over the loan term. Rules have conditions, so confirm with a tax professional.
What is the difference between discount points and origination points?
Discount points buy down your rate. Origination points are a lender fee for making the loan and buy you nothing in rate. Read the Loan Estimate carefully — they appear in different sections.
Ready to Turn Your Estimate Into a Real Pre-Approval?
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Rates are illustrative only. APR and payments vary by credit score, loan amount, and market conditions. Subject to credit approval. Not a commitment to lend. NMLS# 1859012. Equal Housing Lender.