Should you buy points? Buying points when you close your mortgage can reduce its interest rate, which in turn reduces your monthly payment. But each "point" will cost you 1% of your mortgage balance. This calculator helps you determine if you should pay for points, or use the money to increase your down payment. Click on the "View Report" button to review your information.
Definitions
Term
Number of years for this mortgage. Most common terms
are 15 years and 30 years.
Mortgage amount
Total balance for your mortgage. This calculation assumes that the cost of buying points is financed. The loan amount with points will be higher than the loan without points by the cost of the purchased points.
Interest rate
Annual interest rate for this mortgage without purchasing any discount points.
Years in home
The number of years you expect to live in this home or the number of years before you refinance your mortgage.
Principal and interest
Monthly principal and interest (PI) for this mortgage.
Points rate
Annual interest rate for this mortgage with discount points.
Points
The number of discount points you need to receive the lower rate. Each point costs 1% of your mortgage amount.
Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.
