Buying discount points (or mortgage points) means paying extra cash at the time of closing to reduce the interest rate and monthly payments. Another option would be to use that money towards a larger down payments, reducing the loan amount. Which option makes the most sense? Use this calculator to find out how long it will take to recuperate the cost for buying points called the breakeven.
$2,300
105 months
These calculations are tools for learning more about the mortgage process and are for educational/estimation purposes only. Calculator results are rounded down to the nearest dollar. Payment shown does not include taxes, insurance, or mortgage insurance (if applicable). This does not constitute an offer or approval of credit. Contact a PrimeLending home loan officer for actual estimates.
For example, a conventional fixed rate loan, with a loan term of 360 months, loan amount of $572,000, 7.125% interest rate at cost of .051 points ($291.72) paid at closing by borrower, annual percentage rate of 7.178%, down payment of 20%, and a credit score of 740+ with a monthly payment of $3,853.67. Rates pulled 12/5/24, rates subject to change. Loans are subject to borrower qualifications, including income, property evaluation, and final credit approval. Payment shown is principal and interest and does not include amounts for taxes and insurance premiums (if applicable). The actual payment obligation will be greater.