Tool
Break-even calculator
Point made
Use two Loan Estimates from the same lender and day: one with points, one without. Enter the extra upfront cost, the monthly principal and interest savings, and how many years you expect to keep the loan. The calculator shows the break-even month and the simple net result. Fields start empty and nothing is stored.
Last reviewed against the primary sources listed below.
Discount Points & Break-Even Calculator · https://mtgcalculatorbot.com/points-break-even-calculator.html · General education only; nothing you entered was stored.
How to read your result
The result shows how many months of lower payments it takes to earn back what you paid for points. If you expect to sell or refinance before that month, the points likely cost more than they save.
- Break-even month: when savings equal the cost.
- Before that month: points cost you money.
- After it: points save you money.
What to do next
Ask the lender for the same loan with and without points on the same day, and check page two, section A, of each Loan Estimate.
What it leaves out
Investment returns on the cash, taxes and early payoff all change the answer. It is a first screen, not advice.
Points and credits, answered
What if I do not know how long I will keep the loan?
Try several values. If points only pay off in the longest case, they carry more risk.