What this calculator does
Mortgage points breakeven works out whether paying upfront points for a lower rate pays off before you sell or refinance. Enter your own figures above and the answer updates as you type: nothing is fixed in the code, so the result reflects exactly the numbers you supply.
The formula this calculator evaluates is printed under the tool and explained below, so you can check the working by hand or reuse it in a spreadsheet.
The formula
FormulaPoint cost = Points × 1% of the loan amount (the standard definition of a point); Breakeven months = Point cost / (Payment without points − Payment with points)
The inputs explained
| Field | What to enter |
|---|---|
| Loan amount ($) | A number, measured in your currency. Starts at 400000. |
| Loan term (years) | A number, measured in years. Starts at 30. |
| Rate without points (%) | A number, measured in %. Starts at 6.75. |
| Points purchased | A number. Starts at 2. |
| Rate with points (%) | A number, measured in %. Starts at 6.25. |
| Years you plan to keep the loan | A number. Starts at 10. |
Worked examples
Every figure in the tables below is produced by this page’s own calculator at build time, so the numbers and the tool always agree. Select any row to load that scenario.
How the answer changes with loan amount
Every other input is held at the calculator’s starting values while loan amount varies. Select any row to load that scenario into the calculator.
How the answer changes with loan amount
| Loan amount ($) | Breakeven period | Cost of the points | Monthly saving |
|---|---|---|---|
| 200,000 | 60.8 months (5.1 years) | $4,000.00 | $65.76 |
| 300,000 | 60.8 months (5.1 years) | $6,000.00 | $98.64 |
| 400,000 | 60.8 months (5.1 years) | $8,000.00 | $131.52 |
| 600,000 | 60.8 months (5.1 years) | $12,000.00 | $197.29 |
| 800,000 | 60.8 months (5.1 years) | $16,000.00 | $263.05 |
| 1,200,000 | 60.8 months (5.1 years) | $24,000.00 | $394.57 |