Calcs4All

APR 23 · 2026

Discount points calculator

Estimate point cost, monthly savings, and break-even months from buying down a mortgage rate.

What this calculator covers

Use this discount points calculator to estimate whether an upfront point charge may pay back through a lower monthly mortgage payment.

The walkthrough keeps the upfront cash cost and the break-even time in the same view so the tradeoff is easier to compare.

Frequently asked questions

What does one discount point cost?
One point equals one percent of the loan amount. On a $300,000 mortgage, one point costs $3,000 upfront. The calculator converts your point percentage into dollars automatically so the cash outlay is visible.
How does the break-even period work?
The upfront point cost is divided by the monthly payment reduction to find how many months it takes to recover what you paid. If you plan to sell or refinance before that period ends, the points likely do not pay back.
Does the result change if I refinance early?
The break-even estimate assumes the loan runs the full term. Refinancing or selling before the break-even month means the upfront cost is not fully recovered, so shorter expected hold times reduce the value of buying down the rate.
Does this calculator account for the tax deductibility of points?
No. Whether discount points are deductible depends on individual circumstances and current tax rules. Consult a tax professional for guidance specific to your situation.

Tool

Run the calculation

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RESULT · BREAK-EVEN

â„–041

Primary result

41 months

1% in discount points costs about $3,500.00 on $350,000.00. If the rate falls from 6.75% to 6.38%, the payment drops by about $86.55 per month and breaks even in about 41 months.

Points cost
$3,500.00
Base monthly payment
$2,270.09
Discounted monthly payment
$2,183.54
Monthly savings
$86.55
Lifetime payment difference
$31,158.00

Step-by-step solution

  1. 1.Convert the point charge into dollars: 1% of $350,000.00 equals $3,500.00 upfront.
  2. 2.Compare the monthly payment at 6.75% versus 6.38% to estimate $86.55 in monthly savings.
  3. 3.Divide the upfront point cost by the monthly savings to estimate a break-even period of 41 months.

Walkthrough

Visual walkthrough

Discount points are an upfront fee that only make sense if the lower rate saves enough over time to recover that cash outlay.

  1. 01

    Price the upfront points

    $350,000.00 × 1% = $3,500.00

    One point equals one percent of the loan amount, so the point cost scales with the mortgage size.

    $3,500.00 upfront

  2. 02

    Measure the payment drop

    The lower discounted rate should reduce the monthly payment relative to the base-rate option.

    $86.55 lower per month

  3. 03

    Recover the upfront cost over time

    $3,500.00 ÷ $86.55 ≈ 41

    The break-even period helps show how long the loan likely needs to stay in place before the points pay back.

    41 months to break even