Pay Upfront, Save Monthly

Mortgage points are prepaid interest: one point costs 1% of the loan and typically shaves 0.25 points off the rate. This points break-even calculator finds how long the lower payment takes to repay the upfront cost — the single number that decides whether points are worth it.

The Break-Even Logic

Compare the amortized monthly payments with and without points. The savings each month chip away at the points' cost; the break-even month is when cumulative savings equal that cost. The chart draws both cumulative-cost lines so the crossing point is visible.

The Decision Rule

Points pay if you keep the mortgage past break-even — typically 4–7 years. If you plan to sell, refinance, or pay off early, the upfront money is usually better kept as cash. Buyers who itemize can also deduct points in the purchase year, sweetening the deal.