Mortgage points break-even calculator

One point is 1% of the loan amount. On a $100,000 loan, one point is $1,000. Points are paid in cash at closing. Enter the dollar cost from the Loan Estimate. The field is dollars, not a percent, and the cost does not have to be a round number of points.

Two rates, one loan

Both columns use the loan amount and the term you enter. Each column has its own note rate. The page shows the regular principal-and-interest payment, the final payment, the interest through payoff, and the payoff length.

Break-even counts a month only while both loans are still paying that regular amount. It stops when either loan pays off, and it stops before a final payment that differs from the regular payment. If the candidate month is later than that window, the points are not reported as recovered. Interest through payoff comes from each month of the ledger. It is not the monthly savings multiplied by the number of months.

This is not a total of principal, interest, and points. The points cost stays outside both paid totals. It is also not a refinance comparison and does not stop either loan on a date you expect to sell.

Financing points stays out

Both rates use the principal you enter. The page does not add the points to that principal, and it does not treat lender credits as negative points. The comparison is pre-tax.

On $100,000 for 30 years, 6.5% without points and 6.25% with points, the regular payments are $632.07 and $615.72. A $1,000 points cost is recovered at month 62. A $100,000 points cost is not recovered during the 360-month payoff. A $0.50 loan for one year at 15% and 0%, with $0.12 of points, is not recovered during the 10 months both loans pay the regular amount, even though 12 times the one-cent payment difference equals $0.12.

The refinance calculator compares keeping a current loan with replacing it.

Educational comparison of two fixed rates and a points cost paid in cash. It is not a total-cost comparison and not a refinance quote.