Mortgage Points Calculator

Take advantage of our mortgage points calculator if you are thinking about paying for mortgage points. Points are prepaid interest on your loan that are usually tax deductible. A good rule of thumb that says that the longer you intend to keep the loan, the more points you should consider paying.

• Enter ballpark values by clicking on and dragging the diamond-shaped sliders left or right. Enter exact numbers by clicking on the number in the box on the right and type your number (no commas).
• The results of your calculations show in the box at the bottom of the calculator.

Loan Rate
This is the interest rate of a Lower Points loan.

Points
Enter the number of points you can afford to purchase. Each point is equal to 1 percent of the loan amount (e.g., two points on a $100,000 mortgage would cost $2,000).

Loan Amount
Enter the amount of money you plan to borrow.

Loan Term
You should enter the number of years you want the loan.

Savings Rate
Determine the interest rate of an investment you would make if you did not buy points.

Tax Rate
This is your income tax rate.

Our results box will show you where each option will save you money.

Our graph plots your cumulative savings for both the lower and higher point options. The lines intersect at the break-even point, moving the slider to that point; you will see that it corresponds to a year. This will help you determine which option is best for you. If you plan to sell the house before that time you should buy fewer points but if you want to keep it longer the higher points option is better for you.

Click Here to open the Mortgage Points Calculator