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Impact of Discount Points Calculator

Buying discount points (or mortgage points) means paying extra cash at the time of closing to reduce the interest rate and monthly payments. Another option would be to use that money towards a larger down payment, reducing the loan amount. Which option makes the most sense? Use this calculator to find out how long it will take to recuperate the cost for buying points called the breakeven.
 

Buying discount points (or mortgage points) means paying extra cash at the time of closing to reduce the interest rate and monthly payments. Another option would be to use that money towards a larger down payments, reducing the loan amount. Which option makes the most sense? Use this calculator to find out how long it will take to recuperate the cost for buying points called the breakeven.

$

Enter the total amount of the loan. This would be the original amount, before any payments to the principal.

%

Enter the annual interest rate as a percentage. This is the rate you receive before buying discount points.

Choose the length of the loan term you plan to use. Standard loan terms are 15 or 30 years.

%

Choose the number of points to buy. Each point is equal to 1 percent of the loan amount, for instance 2 points on a $100,000 loan would cost $2000. You can buy up to 5 points.

%

Enter the annual interest rate for this mortgage with discount points as a percentage.

1 point(s) will require a payment of
$2,000
You would breakeven in
105 months

If you plan to move or refinance sooner than the breakeven date, consider putting the money towards a larger down payment.

Monthly Payment with points: $926
Monthly Payment without points: $983
CALCULATE

These calculations are tools for learning more about the mortgage process and are for estimation purposes only. Payment shown does not include taxes, insurance, or mortgage insurance (if applicable). This does not constitute an offer or approval of credit. Contact a PrimeLending home loan officer for actual estimates.

For example, a Conventional fixed rate loan with a loan amount of $200,000, on a loan term of 360 months, with a credit score of 740+, down payment of 20%, and an interest rate of 3.375%, will result in an annual percentage rate of 3.452%. Rate pulled 6/18/20, rates change daily. Loans are subject to borrower qualifications, including income, property evaluation, and final credit approval.

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