The Mortgage Points Calculator will help you determine whether or not paying for points is the best option for you. Points are sometimes referred to as loan discount points. Points are prepaid interest on your loan. Usually, home buyers will pay points to lower the interest rate and save on taxes, since points are usually tax deductible as interest. You may want to follow the rule of thumb that says that the longer you intend to keep the loan, the more points you should consider paying.

• Enter ballpark values by clicking on and dragging the diamond-shaped sliders left or right. Enter exact numbers by clicking on the number in the box on the right and type your number (no commas).
• The results of your calculations show in the box at the bottom of the calculator.

Loan Rate

This is the interest rate of Lower Points loan.

Points

Points are prepaid interest assessed at closing by the lender. Each point is equal to 1 percent of the loan amount (e.g., two points on a $100,000 mortgage would cost $2,000).

Loan Rate

This is the interest rate of Higher Points loan.

Points

Points are prepaid interest assessed at closing by the lender. Each point is equal to 1 percent of the loan amount (e.g., two points on a $100,000 mortgage would cost $2,000).

Loan Amount

This is the amount of money you want to borrow.

Loan Term

This is the length of time you want the loan.

Savings Rate

The is the interest you would earn were you to invest your money instead of paying it in points.

Tax Rate

This is your income tax rate.

Results

The results box highlights where each option will save you money.

Graph

The graph plots your cumulative savings for both the lower and higher point options. Grab the diamond-shaped slider at the bottom right of the graph and slide it to a specific year. You can see the comparative readout above the graph. . Where the lines intersect is the break-even point, moving the slider to that point, you will see that it corresponds to a year. If you plan to sell the house before that time, the lower points option is the loan to go with. If you plan to keep the house for longer than that, the higher points option is better for you.