ParrotNotes

Mortgage Points Calculator

Work out what buying mortgage discount points costs, how much they lower the rate and monthly payment, and how many months until they pay for themselves. Set the rate drop per point from the lender's quote, add how long the buyer expects to keep the loan, and compare up to three points options side by side.

Your numbers

$
years
%

Fixed, from the lender's quote.

1 point = 1% of the loan. Fractions are fine.

%

0.25 is a placeholder: lenders set their own. From a quote: (rate without − rate with) ÷ points.

years

Optional: until a sale or refinance. Blank for the full term.

points

Optional.

points

Optional.

Break-even (points cost ÷ monthly saving)

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Cost of the points
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Rate with the points
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Monthly payment without points
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Monthly payment with the points
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Monthly saving
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Net saving over 30 years (saving × months − cost)
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Interest over the full term, no points
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Interest over the full term, with the points
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Interest saved over the full term
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An estimate at a fixed rate from the numbers you typed. Not financial, tax or legal advice: each lender prices points its own way. Whether points are deductible: see IRS Topic 504 and Publication 936.

The drop per point is the 0.25 placeholder. Replace it with the lender's quote for a real answer.

The calculation runs in your browser and ParrotNotes does not store your numbers. They sit in the page address so you can bookmark or share the result.

How the points are worked out

Points cost = loan × points ÷ 100. Rate with the points = rate without − points × the drop per point. Each monthly payment is principal and interest on a fixed rate: payment = loan × r ÷ (1 − (1 + r)^−n), r = rate ÷ 12, n = years × 12. The monthly saving is the payment without the points minus the payment with them.

Worked example: a $400,000, 30-year loan at 7% with two points at 0.25 each. The points cost $8,000 and the rate falls to 6.5%. The payment drops from $2,661.21 to $2,528.27, a saving of $132.94 a month. Over the full term the interest falls from $558,035.59 to $510,177.95.

Break-even and how long the loan is kept

Break-even = points cost ÷ monthly saving, rounded up to a whole month: $8,000 ÷ $132.94 = 60.2, so the 61st month (5 years, 1 month). Before that, the points have cost more than they saved.

Type how many years the buyer expects to keep the loan before selling or refinancing, and the calculator shows the net saving over that time: 84 months of savings ($11,166.78) − $8,000 = $3,166.78 over 7 years. Add a second and third points option to compare them side by side with no points. With the same drop per point, more points save more each month, but the break-even barely moves; a lender's real quotes often do not drop the rate evenly, so type each option's actual drop.

What this calculator does not do

It assumes a fixed rate and payments on schedule. The net saving counts only the lower payments against the cost; the slightly lower balance a lower rate leaves at sale, the return the cash could have earned elsewhere, taxes and the loan's other closing costs are left out. It does not know any lender's pricing. Use it to compare the options on a Loan Estimate, not as a quote.

Sources, read on 2026-10-27:

Structuring the sale? The seller financing calculator works out an owner-financed note with a balloon, and the home sale proceeds calculator shows what the seller walks away with.

More for loan officers and agents: Mortgage loan officers: borrower meetings and follow-up notes, Mortgage loan officer vs mortgage broker, Tips for new real estate agents.

The rate options come from the lender call

Rates with and without points are walked through on the call with the lender or at the buyer consult. Record it in ParrotNotes and get a structured note, a summary and the action items, so the quoted rates and costs are in the note. Free for 100 minutes of recording a month.

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Mortgage points calculator FAQ