Calculator
Discount Points Break-Even Calculator
Compare a base rate with a bought-down rate. See the P&I savings each month and how long it takes those savings to recover the upfront cost of the points.
Monthly P&I savings
$78.26
Break-even
82 months (~6.8 years)
Methodology
Break-even months = upfront points cost ÷ monthly P&I savings. Monthly savings = P&I at base rate − P&I at bought-down rate, using the standard amortization formula.
Assumptions
You hold the loan long enough to reach break-even, and rates/terms don't change. Ignores taxes, insurance, and time value of money.
Limitations
Does not model prepayment, refinance, tax treatment of points, or lender credits. Discount point cost and rate discount vary by lender and market.
Last reviewed: pending review