Mortgage Points Calculator
Calculate whether buying mortgage discount points saves money and how long to break even.
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Frequently Asked Questions
What are mortgage discount points?
Mortgage points are upfront fees paid to the lender in exchange for a lower interest rate. One point = 1% of the loan amount. On a $350,000 loan, one point costs $3,500 and typically reduces the rate by 0.20-0.25%. Points make sense if you plan to keep the loan long enough to recoup the upfront cost via monthly savings.
When is it worth buying mortgage points?
Buying points is worth it when: your break-even period (cost divided by monthly savings) is less than how long you plan to keep the loan. If you will refinance or sell within 5 years, points rarely make sense. If you are in your forever home with a 30-year loan and have cash available, points can save tens of thousands.
Are mortgage points tax deductible?
Yes — for your primary residence, mortgage discount points are generally deductible as mortgage interest in the year of purchase (if buying a home) or amortised over the loan life (if refinancing). Consult a tax professional as rules vary based on loan purpose, amount and use. Points on rental properties are typically deductible over the loan life.