Mortgage points and buydown calculator

See whether paying discount points or a temporary 2-1 / 3-2-1 buydown is worth it. Compare monthly savings, upfront cost, break-even, and lifetime interest in plain English.

Your numbers

Loan amount

Base rate

Illustrative example rate. Not an available or quoted rate.

Loan term

yrs

Points purchased

Each point typically equals 1% of the loan amount

Rate reduction per point

Common rule of thumb: about 0.25% per point

Cost per point

% of loan amount per point (typically 1%)

Expected hold period

yrs

How long you plan to keep this loan

Is this worth it?

Points pay for themselves in about 5 years and 1 month. Over the 7 years you expect to keep this loan, you would net about $1,632 after recovering the upfront cost.

Rate & payment

Base rate6.75%

Bought-down rate6.50%

Payment without points$2,724

Payment with points$2,655

Monthly savings$69

Upfront cost & break-even

Upfront cost of points$4,200

Break-even61 mo (5.1 yrs)

Net benefit over 7 yr hold$1,632

Lifetime interest

Total interest without points$560,680

Total interest with points$535,687

Interest saved if held to full term$24,993

Results are estimates based on user inputs and do not represent loan terms, APR, or a financing offer. Pre-filled values are illustrative examples, not available or quoted rates. Actual terms depend on credit, property, program, and underwriting. Every result applies to the entered planning scenario, not an observation period or local market statistic. Replace price, tax, insurance and fee allowances with dated, property-specific figures. Missing inputs are not assumed to be zero.

Want a real quote with points priced in?

Talk it through with a loan officer to see what points, seller credits, or a temporary buydown actually look like on your loan. Free, no pressure.

Download free guide (PDF)

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Frequently asked questions

What is the difference between discount points and a temporary buydown?

Discount points are a permanent buydown. You pay a fee at closing (each point is typically 1% of the loan amount) and the rate is lowered for the life of the loan. A temporary buydown (2-1 or 3-2-1) lowers the rate only for the first 2 or 3 years, then it returns to the note rate. Temporary buydowns are usually funded by a seller or lender credit rather than by the borrower.

How much does one discount point typically lower the rate?

A common rule of thumb is about 0.25% per point, but the actual reduction varies by lender, program, and market. This calculator lets you adjust the reduction per point so you can model a specific quote.

When are discount points worth paying?

When you plan to keep the loan longer than the break-even period. If the break-even is 48 months and you expect to move or refinance in 3 years, the points probably don't pay off. If you plan to stay for a decade, they usually do.

Who pays for a temporary buydown?

Most temporary buydowns are funded by a seller credit (common in buyer-friendly markets) or by the lender. The full subsidy is collected at closing and deposited in an escrow account that covers the rate difference each month during the buydown period.

Are discount points tax deductible?

Points paid on a primary-residence purchase are generally deductible as mortgage interest in the year paid, subject to IRS rules. Refinance points are typically deducted over the life of the loan. Talk to a tax professional for your situation. This calculator does not model tax benefits.

Related glossary terms

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Want the story behind the numbers?

ArticleWhat actually moves mortgage rates (and what does not)Why the rate you're buying down is where it is.Read
Try: Refinance
HubWhen to refinanceWhen buying points beats waiting for a refi.Read
HubFirst-time buyer hubHow points fit into the full purchase decision.Read

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