Mortgage points break-even calculator.

How the numbers work

Per the CFPB, one point equals one percent of the loan amount, so one point on a $100,000 loan is $1,000. Lender credits work the same way in reverse: a higher rate in exchange for money toward closing costs (enter credits as negative points). Monthly principal and interest uses the standard fixed-rate amortization formula. Break-even months is the extra upfront cost of quote B divided by the monthly payment savings, rounded up. Interest saved compares total interest paid on each loan through the years you plan to keep it.

The CFPB suggests comparing offers with the same amount of points or credits from each lender, and checking costs over a short, a long and a most-likely holding period. Source: CFPB, What are points and lender credits and how do they work? Looking at refinance closing costs instead? Use the refinance break-even calculator.

This tool is a planning estimate, not financial advice. It ignores taxes, escrow, mortgage insurance, other fees and the option to refinance or sell early. Confirm figures against your Loan Estimate.

Worked example: one point to lower the rate from 6.75% to 6.375%

Compare the two sample quotes the calculator starts with, on a $400,000, 30-year loan. Quote A is 6.75% with no points; quote B is 6.375% with 1 point. One point is 1% of the loan, so B costs $4,000 more at closing. The calculator returns a monthly payment of $2,594 on A and $2,495 on B, a difference of $99/mo, so the extra $4,000 is recovered in 41 months (3.4 years).

• Points are a bet on how long you stay. Keep the loan 3 years and the point loses $439; keep it 10 and it gains $7,870.
• The break-even is the same in each case: 41 months (3.4 years), because it depends only on the extra upfront cost and the monthly saving.

Next steps: see whether replacing a loan pays off with the refinance break-even calculator, compare loan terms in the 15-year vs 30-year calculator, or estimate a lump-sum paydown with the mortgage recast calculator.

How this is calculated

• Points cost = loan × points ÷ 100 (one point = 1% of the loan). Negative points are lender credits.
• Monthly principal and interest = L × i ÷ (1 − (1 + i)⁻ⁿ), with i = rate ÷ 12 and n = months.
• Break-even months = (extra upfront cost of B) ÷ (monthly payment saving), rounded up.
• Interest saved over your holding period = interest paid on A less interest paid on B for the months you keep the loan.

The calculator uses only the rates and points you enter from your Loan Estimates; it assumes no rate cut per point. The Consumer Financial Protection Bureau explains that one point equals one percent of the loan amount, that points lower your interest rate in exchange for paying more at closing, and suggests asking a loan officer for the total costs over the shortest, longest and most likely time you will keep the loan (CFPB, What are points and lender credits, checked 1 October 2026). Taxes, escrow, mortgage insurance and other fees are not modelled.

General information, not financial advice. Your Loan Estimate is the authority on actual costs.