Mortgage points calculator
The month a lower rate has paid back what it cost up front, and where you stand if you give the loan up before or after that.
An example. Your lender sets the real rate.
From your lender's quote. What a point buys varies.
One point is 1% of the loan.
The points have paid for themselves by
Month 62
5 yr 2 mo of payments $52.32 lower · after 7 years you are $2,420 ahead, counting the lower balance
- Payment
- $2,022.62
- With points
- $1,970.30
- Lower by
- $52.32
- After 7 years
- $2,420
- Interest saved, full term
- $18,836
The month is the cost divided by the monthly saving. The figure after the years you entered also counts the slightly lower balance the lower rate leaves, which matters if you sell or refinance. It does not count what the cash could have earned elsewhere or done as a larger down payment, and it leaves out tax. The rates are your own figures. It does not say whether to pay points.
Questions
- What is a point?
- A fee paid at closing in return for a lower rate, quoted as a percentage of the loan: one point is 1%. How much rate a point buys differs between lenders and from day to day, so the calculator asks for both rates from your own quote.
- Why are there two answers?
- The simple one divides the cost by the monthly saving. The other also counts that the lower rate leaves you owing slightly less, which matters if you sell or refinance. Both are shown.
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