Most points calculators assume a fixed 0.25% rate drop per point. Yours might not work that way. Enter your lender's real numbers below and see your actual break-even point — plus what that same cash could do if you invested it instead.
Every lender prices points differently. Enter what your actual Loan Estimate shows — don't assume the textbook 1% cost / 0.25% reduction numbers apply to you.
| Points | Upfront Cost | Rate | Monthly Pmt | Break-Even | Cost at 7yr Hold |
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Want to see how this fits into your full mortgage picture?
Run Your Full Mortgage Calculator →A mortgage point — sometimes called a discount point — is an upfront fee you pay your lender in exchange for a lower interest rate on your loan. One point typically costs 1% of your loan amount and typically lowers your rate by about 0.25%, though both of those numbers vary by lender, loan type, and current market conditions. That's exactly why this calculator lets you plug in the actual figures from your own Loan Estimate instead of assuming the textbook version applies to you.
Most calculators you'll find online use one fixed assumption — 1% cost, 0.25% reduction — and never let you change it. In reality, lenders price points differently based on your credit profile, loan type, and the day's market conditions. A lender might charge you 1.2% for the same 0.25% reduction, or offer 0.375% off per point instead of the standard quarter-point. If you run the numbers using assumptions that don't match your actual offer, your break-even calculation is wrong before you even start — which is exactly the gap this tool is built to close.
Every point you buy costs money today in exchange for saving money every month going forward. Break-even is the point in time where your monthly savings finally add up to more than what you spent upfront. Buy points and sell the house (or refinance) before that break-even date, and you've lost money on the deal — the monthly savings never had enough time to repay the upfront cost.
Here's what almost every points calculator skips entirely: the cash you'd spend on points isn't free — it's money that could otherwise sit in an investment account, growing. Toggle on the investment comparison above to see what your point money could realistically become over your hold period if invested instead at a reasonable rate of return, rather than spent upfront on a rate reduction. Sometimes buying points still wins. Sometimes it doesn't. The only way to know is to actually run both numbers side by side for your specific situation — which is exactly what this tool does.
Negative points (sometimes called lender credits) work in reverse — you accept a higher rate in exchange for the lender covering some of your closing costs. This can make sense if you're short on cash at closing or don't plan to keep the loan long enough to benefit from a lower rate.
Some lenders allow this, but it increases your loan balance and the interest you pay on that balance over time — which can erode much of the benefit. Paying points in cash at closing, if you can afford it, generally produces a cleaner break-even.
The mechanics are identical, but the break-even question is often more urgent on a refinance — you're already resetting your loan, so it's worth being especially honest with yourself about how long you'll actually keep this particular loan before buying points on it.
Most lenders cap it around 3-4 points, and some loan programs (particularly FHA and VA) have specific limits on how much of your closing costs can come from points and lender credits combined. Confirm your specific program's limit with your loan officer.
Ask for a rate sheet or a few Loan Estimates showing the rate at 0, 1, 2, and 3 points. Most lenders can generate this in a few minutes and it gives you the exact numbers to plug into this calculator instead of relying on general assumptions.