See whether paying mortgage discount points is worth it. Each point costs 1% of your loan and typically buys the rate down by about 0.25%. This calculator shows the cost, your new monthly payment, the monthly savings, and how many months it takes to break even — the exact buy-down varies by lender, per the CFPB.
Discount points are an upfront fee you pay the lender to lower your interest rate. One point costs 1% of the loan amount and typically reduces the rate by around 0.25%, though the exact buy-down varies by lender. The CFPB explains points and lender credits in its consumer guide.
Points pay off only if you keep the loan past the break-even point — the cost of the points divided by the monthly payment savings. If you might sell or refinance before then, you would lose money. This tool computes that break-even for your numbers.
Break-even months = cost of the points ÷ monthly payment savings. For example, $3,000 in points that save about $49 a month break even in roughly 61 months, or a little over five years.