Discount Points Calculator

Compare mortgage discount points, monthly payments, break-even timing and net costs before selling or refinancing.

Compare entered fixed-rate quotes and upfront costs in USD. One point costs 1% of principal; rate reductions are lender-specific.

Compare actual rate/points quotes, cash-flow and balance-aware break-even, and savings at your expected sale or refinance date.

Result

Net borrowing-cost savings at horizon (B vs A)$769.61

At 60 months, modeled borrowing-cost savings for offer B are $769.61; positive favors B and negative favors A. Cash-flow savings are -$24.59, with the remaining-balance difference reported separately.

Monthly payment saving (A minus B): $49.59
First net-cost break-even month: 48

Result breakdown (14)

Offer A monthly P&I$1,945.79

Offer B monthly P&I$1,896.20

Offer A points or credit amount$0.00

Offer B points or credit amount$3,000.00

Additional upfront cost for B$3,000.00

Net cash-flow savings at horizon-$24.59

Balance advantage of B at horizon$794.20

Offer A interest and upfront costs at horizon$98,374.79

Offer B interest and upfront costs at horizon$97,605.18

First cash-flow break-even month61

Simple payment-savings break-even (months)60.4958

Lifetime interest savings (A minus B)$17,852.48

Lifetime savings after upfront costs$14,852.48

Selected holding period in months60

Discount points savings over the full term

Net borrowing-cost savings$14,852.48
Net cash-flow savings$14,852.48

A simplified view of the calculated schedule. Positive favors offer B; negative favors A. Borrowing-cost savings include the remaining-balance difference. The primary result uses your selected holding period, while this curve covers the full loan term. Open calculation details for exact values.

Calculation details & assumptions

Compare two same-principal, same-term fixed-rate quotes. One point costs 1% of loan principal. Fractional points are allowed; negative points represent an entered lender credit. A point does not guarantee a fixed interest-rate reduction: enter both quoted rates from the Loan Estimates.

Points and entered other upfront costs are paid in cash, not financed. Offer A is the baseline; a positive B savings value favors B, and a negative value favors A. Same ownership costs are excluded; no tax deductions, discounting, opportunity cost, mortgage insurance or prepayment penalties are modeled.

Net borrowing-cost savings = interest paid A − interest paid B − additional upfront cost B. Equivalently it includes payment differences PLUS the remaining loan-balance advantage. Cash-flow savings use payments alone and can give a later break-even. The simple upfront-cost/monthly-saving ratio is only a shortcut and may be beyond the loan term.

First break-even is the first nonnegative point in the modeled month-by-month comparison, not a guarantee of permanent advantage. A credit/higher-rate quote can start ahead and later become more expensive. Check your selected sale/refinance horizon; zero months compares upfront costs only. The final payoff is capped at the actual amount owed.

Calculation details

Scroll horizontally or vertically to see more. Download CSV for the complete schedule.

Month	Net cash-flow savings	Balance advantage of B	Net borrowing-cost savings	Balance A	Balance B
1	-2,950.41	12.91	-2,937.50	299,741.71	299,728.80
2	-2,900.82	25.84	-2,874.98	299,481.96	299,456.12
3	-2,851.23	38.78	-2,812.45	299,220.75	299,181.97
4	-2,801.64	51.73	-2,749.90	298,958.07	298,906.34
5	-2,752.05	64.71	-2,687.34	298,693.92	298,629.21
6	-2,702.46	77.70	-2,624.76	298,428.28	298,350.58
7	-2,652.87	90.70	-2,562.17	298,161.14	298,070.44
8	-2,603.28	103.72	-2,499.56	297,892.50	297,788.79
9	-2,553.69	116.75	-2,436.94	297,622.35	297,505.60
10	-2,504.10	129.80	-2,374.30	297,350.69	297,220.89
11	-2,454.51	142.86	-2,311.65	297,077.49	296,934.63
12	-2,404.92	155.93	-2,248.99	296,802.76	296,646.82
13	-2,355.33	169.02	-2,186.31	296,526.48	296,357.46
14	-2,305.74	182.12	-2,123.61	296,248.64	296,066.52
15	-2,256.15	195.24	-2,060.91	295,969.25	295,774.01
16	-2,206.56	208.36	-1,998.19	295,688.28	295,479.92
17	-2,156.97	221.50	-1,935.46	295,405.73	295,184.23
18	-2,107.38	234.66	-1,872.72	295,121.60	294,886.94
19	-2,057.79	247.82	-1,809.96	294,835.86	294,588.04
20	-2,008.20	261.00	-1,747.20	294,548.52	294,287.52
21	-1,958.61	274.19	-1,684.42	294,259.56	293,985.37
22	-1,909.02	287.38	-1,621.63	293,968.98	293,681.59
23	-1,859.42	300.59	-1,558.83	293,676.76	293,376.16
24	-1,809.83	313.82	-1,496.02	293,382.89	293,069.08
25	-1,760.24	327.05	-1,433.20	293,087.38	292,760.33
26	-1,710.65	340.29	-1,370.37	292,790.20	292,449.91
27	-1,661.06	353.54	-1,307.53	292,491.35	292,137.81
28	-1,611.47	366.80	-1,244.67	292,190.82	291,824.02
29	-1,561.88	380.07	-1,181.81	291,888.60	291,508.53
30	-1,512.29	393.35	-1,118.95	291,584.68	291,191.33
31	-1,462.70	406.63	-1,056.07	291,279.05	290,872.41
32	-1,413.11	419.93	-993.18	290,971.70	290,551.77
33	-1,363.52	433.23	-930.29	290,662.62	290,229.39
34	-1,313.93	446.54	-867.39	290,351.80	289,905.26
35	-1,264.34	459.86	-804.48	290,039.24	289,579.37
36	-1,214.75	473.19	-741.56	289,724.91	289,251.73

How to use this calculator

Compare actual rate/points quotes, cash-flow and balance-aware break-even, and savings at your expected sale or refinance date. Enter amounts in the units shown, select the applicable options, and click Calculate. Use Reset to restore the starting values.

Calculation formula

Point cost = principal × points / 100. Net horizon saving B = cumulative interest A − cumulative interest B − (upfront B − upfront A). Cash-flow saving excludes the balance advantage.

Assumptions and accuracy

Review timing, rates, fees and result notes when comparing scenarios. Future returns and rates are assumptions rather than guaranteed outcomes. Monetary display follows the currency’s precision; intermediate calculations retain additional digits.

Choose what to calculate

Discount points calculator

Compare entered mortgage rate and point quotes, monthly savings and net cost at a sale or refinancing horizon.

Open this calculation

Understanding this calculation

Compare two fixed-rate loan quotes with the same principal and term. Points cost 1% of principal per point, but the rate reduction must come from the lender’s actual quote. The comparison distinguishes monthly cash savings from interest-and-fee savings at a sale or refinancing horizon.

Reading your result

Net borrowing-cost savings at horizon (B vs A): Interest and upfront costs saved by offer B; positive favors B, negative favors A.
Net cash-flow savings at horizon: Payment savings less additional upfront cost, excluding the balance difference.
First net-cost break-even month: The first modeled month that B’s interest/fee cost is no higher than A’s, not a guarantee of permanent advantage.

Compare two scenarios

Enter two actual same-principal, same-term Loan Estimate rate/point quotes.
Change only the sale/refinance holding period to compare short- and long-term costs.

Check before comparing

One point is a fee equal to 1% of principal, not a fixed rate reduction.
Points and fees are paid in cash in this model.
Compare cash-flow savings and remaining principal together.

Result explanations checked 2026-10-26 against this calculator’s local model. Model scope and sources appear below.

Worked examples

One point costs one percent, not a promised rate reduction

$100,000 principal; A quoted at 6% with no points; B quoted at 5.75% with one point. Both quotes are entered assumptions.

Offer B point cost = 100,000 × 1% = 1,000.
Each monthly payment is calculated from its own quoted rate over 360 months.
The rate reduction is not generated from the number of points: the lender must quote both.
At sale or refinancing compare interest plus upfront costs, not only the difference in payments.

One point costs $1,000 on this loan; the break-even depends on the quoted rates and holding period.

Try these inputs

Points with no rate benefit never recover their cost

Both loans are $12,000 for two years at 0%; only offer B charges one point.

Both monthly payments are 12,000 / 24 = 500.
Offer B costs an extra 12,000 × 1% = 120 upfront.
There is no interest or payment saving to offset the extra cost.

B is $120 more expensive at the selected horizon; no break-even is reached within the term.

Try these inputs

Common questions

Does one point always reduce my rate by 0.25%?

No. One point describes a fee equal to 1% of principal. The lender, loan type and market determine the quoted rate change.

Why are cash-flow and borrowing-cost break-even different?

Payment savings exclude differences in principal repaid. Borrowing-cost savings compare interest and upfront costs, equivalently including the remaining-balance advantage at sale or refinancing.

What holding period should I use?

Use the expected time before selling, refinancing or paying off the loan, and compare shorter and longer alternatives. Zero months compares upfront costs only.

Can I enter lender credits?

Yes. Negative points are treated as a cash credit at closing. A higher-rate quote can start ahead and later become more costly; first break-even is not a promise of a permanent advantage.

Are taxes or financed points included?

No. Points and entered other fees are paid in cash. Tax deductibility, financed closing costs and the opportunity cost of cash need a different analysis.

Scope and assumptions

Cash-paid points and entered upfront costs on same-principal, same-term fixed-rate quotes. Negative points represent an entered lender credit. No financed fees, tax deduction, discounting, ownership-cost difference, PMI or prepayment penalty is inferred.

Sources

Calculation notes checked October 26, 2026. Examples are mathematical checks under the stated assumptions.

Calculation methods and formulas

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