Points Strategy Calculator
Find out if buying points makes sense for your situation
What are discount points?
Discount points let you pay upfront to lower your interest rate. One point typically costs 1% of your loan amount and lowers your rate by about 0.25%. It's a trade-off: pay more now, pay less each month. The question is whether you'll stay in the loan long enough to break even.
Compare Options
$
Option A: No Points
Option B: With Points
$
Analysis
No Points Payment
$1,946
With Points Payment
$1,896
Monthly Savings $50
Break-Even Point 60 months (5 years)
Savings at 7 years $1,200
Points make sense in your case
You'll break even in 5 years and save $1,200 over your expected 7-year stay.
Full Comparison
| Metric | No Points | With Points |
|---|---|---|
| Upfront Cost | $0 | $3,000 |
| Interest (full term) | $400,576 | $382,633 |
| Total Cost (full term) | $700,576 | $685,633 |