Mortgage Points Calculator
Should you pay discount points up front to buy down your mortgage rate? Enter your loan, the base rate, and the points you'd buy — and see your monthly savings, the exact month you break even, the lifetime interest you'd save, and the opportunity cost of paying that cash today instead of investing it.
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How discount points work — and when they're worth it
A discount point is a fee you pay the lender at closing to permanently lower your interest rate. One point costs 1% of the loan amount and usually buys the rate down by roughly a quarter of a percentage point — though the exact trade varies by lender and by the day. A lower rate means a lower monthly payment and less interest over time, but you've paid real cash up front to get it.
The whole decision comes down to one number: the break-even month.
- Break-even: the points cost divided by your monthly payment savings — how many months of lower payments it takes to recoup what the points cost.
- Your horizon: if you'll sell or refinance before break-even, points lose money; keep the loan well past it and they pay off, with every month after that pure savings.
There's a second, quieter question the calculator answers too: opportunity cost. The cash you spend on points could instead be invested. If that money would have grown more in the market over your stay than the points save you, the points lose on a net basis even if they break even on paper. The tool weighs both forces and names a winner — with the honest caveats spelled out.
Common questions
- How much does one point cost and how much does it lower my rate?
- One point costs 1% of your loan amount — on a $400,000 loan that's $4,000 — and typically buys the rate down by about 0.25%, though it ranges by lender. You can enter the rate-with-points directly, or a reduction per point; the calculator shows both the cost and the bought-down rate either way.
- Should I buy points or just invest the cash?
- Buying points is a guaranteed saving tied to your stay; investing the same cash is an expected return with risk. The calculator grows the points cost at a return you choose and compares it against what the lower payments save you over your stay, so you can see the opportunity cost before deciding.
- Is anything saved or sent anywhere?
- No. Every number runs in your browser. Nothing you type is uploaded, stored, or shared — and you can export the full amortization schedule to CSV with one click.
Big up-front decisions, made clearer
Taly auto-splits every paycheck across your budget — so you can see what a big up-front cost like points really does to your month, before you commit. Your paycheck does the math.