Mortgage points calculator
Using points to lower your interest rate.
What are mortgage points
When you buy mortgage points, you’re paying part of the interest on your loan up front. This shrinks your monthly payment because your lender receives a lump sum at closing and collects less money every month.
How mortgage points work
Each mortgage discount point usually costs 1% of your total loan amount, and lowers the interest rate on your monthly payments by 0.25%. For example, if your mortgage is $300,000 and your interest rate is 3.5%, one point costs $3,000 and lowers your monthly interest to 3.25%.
When to consider points
It makes sense to buy points if you plan to stay in your home for a longer period of time, as you'll be making more monthly payments over the long haul. If you plan to move or refinance within the next 2–4 years, paying for points may not be ideal.