Mortgage Points Cost Calculator
Calculate the upfront cash required to purchase mortgage discount points. Enter your loan amount and the percentage of points you intend to buy to see the closing cost portion attributed to points.
This calculator provides an estimate of point costs only. Review lender disclosures and consult a mortgage professional before committing funds.
Examples
- $200,000 loan with 1.0% in points ⇒ $2,000 upfront
- $250,000 loan with 2.0% in points ⇒ $5,000 upfront
- $180,000 loan with 0.5% in points ⇒ $900 upfront
FAQ
What are mortgage discount points?
They are optional fees paid at closing to permanently lower the loan's interest rate, effectively prepaying interest.
Are discount points tax-deductible?
In many cases they are deductible in the year paid for a primary residence, but tax treatment varies—consult a CPA.
How do I know if buying points is worthwhile?
Divide the upfront cost by the monthly payment savings to find the breakeven months; if you plan to keep the mortgage longer than that, points may pay off.
Do points apply to adjustable-rate mortgages (ARMs)?
Yes, but the rate reduction may only apply during the initial fixed period—ask your lender for specifics.
Can lenders limit how many points I can buy?
Yes. Investor guidelines often cap discount points to preserve loan-to-value requirements and regulatory limits.
Additional Information
- Discount points reduce the interest rate by a set amount per point, typically 0.125%–0.25% per point.
- Compare the upfront cost against monthly savings to determine the breakeven period.
- Points are usually calculated on the base loan amount before lender credits or prepaid interest.
- Some lenders allow partial points—enter fractions like 0.875 to model them.