Lender Point Calculator

Calculate mortgage points to understand how they affect your loan costs and interest rate

Input Parameters

Calculation Results

Total Cost of Points

$2,000.00

Based on 1 points at $2,000 per point

New Interest Rate

4.75%

Original rate: 4.50% | Increase: 0.25%

Monthly Payment Difference

$-43.64

Higher by $43.64 per month with points

Break-Even Point

46 months

You'll recoup your point costs if you keep the loan for at least 46 months

Lender Point Calculator Calculator Usage Guide

Learn how to use the Lender Point Calculator to make informed mortgage decisions

What are Mortgage Points?

Mortgage points are optional fees you can pay to reduce your mortgage interest rate. Each point typically costs 1% of your loan amount and reduces your rate by 0.25 percentage points.

How to Use This Calculator

  1. Enter your loan amount (the principal amount you plan to borrow)
  2. Input your current interest rate
  3. Set the expected rate change per point (typically 0.25% for each point)
  4. Specify how many points you're considering
  5. Enter the cost per point (if different from the standard 1% of loan amount)
  6. Click "Calculate" to see the financial impact

Understanding the Results

  • Total Cost of Points: The upfront cost of purchasing points
  • New Interest Rate: Your adjusted interest rate after points
  • Monthly Payment Difference: How your monthly payment changes
  • Break-Even Point: How many months you need to keep the loan to recoup your point costs

When to Use Points

You might consider points if:

  • You plan to keep your mortgage for several years (generally 3-5+ years for break-even)
  • You want to lower your monthly payments
  • You can afford the upfront cost

Formula Explanation

New Interest Rate = Current Rate + (Points × Rate Change per Point)

Where:
Current Rate = Your existing mortgage interest rate
Points = Number of points you purchase
Rate Change per Point = The amount the rate decreases for each point purchased