Discount points, lender credits and buydowns, weighed on your own numbers
Break-even thinking
Point made
The simple break-even divides the extra upfront cost of points by the monthly payment savings. If points cost more than you save before you expect to sell or refinance, they lose money. The calculation ignores what you could earn on the cash instead and any tax effect, so treat it as a first screen.
Last reviewed against the primary sources listed below.
The question that matters most
How long will you keep this exact loan? Moves, refinances and life changes cut many loans short, which shortens the time points have to pay off.
Points and credits, answered
How do you calculate break-even on mortgage points?
Divide the extra cost of the points by the monthly principal and interest savings to get the months needed to recover it.