Mortgage Points Breakeven Months
Quickly see whether mortgage discount points pay off before you plan to sell or refinance. Enter the upfront cash required and the monthly payment drop to compute payback months, then compare it with your timeline and the discounted value of the lower payment stream.
Not mortgage advice—confirm with your lender before funding a loan.
Examples
- $7,200 in points for a $185 payment drop with a 96-month horizon and 5% opportunity cost ⇒ Breakeven occurs in 38.92 months • Ownership horizon of 96.00 months leaves 57.08 months of pure savings • Present value of payment relief: $14,613.05 USD at 5.00% annual opportunity cost • Net present value after points: $7,413.05 USD.
- $3,800 in points and a $95 payment drop with default horizon/opportunity cost ⇒ Breakeven occurs in 40.00 months • Ownership horizon of 84.00 months leaves 44.00 months of pure savings • Present value of payment relief: $6,950.13 USD at 4.00% annual opportunity cost • Net present value after points: $3,150.13 USD.
FAQ
Do I include seller credits in the points cost?
Yes—use the cash that actually leaves your pocket after any lender or seller credits so the breakeven reflects your net outlay.
How do temporary buydowns compare?
Temporary buydowns usually have shorter savings windows, so enter the total upfront subsidy and the monthly relief specific to that buydown to compare apples to apples.
What if I plan to refinance sooner?
Shorten the ownership horizon to your expected refi timeline. If the breakeven exceeds that date, points probably don’t pencil out.
Additional Information
- Result unit: months plus supporting present-value savings shown in U.S. dollars.
- The ownership horizon defaults to 84 months (roughly the U.S. median), but you can match it to a likely move or refinance date.
- Opportunity cost treats points as an investment; increasing the rate makes future payment relief less valuable today.