Mortgage Points Calculator
Calculate your break-even point on discount points and whether buying points makes financial sense for your timeline.
Are Mortgage Points Worth It in 2026?
Mortgage discount points are an upfront payment that buys down your interest rate. One point equals 1% of your loan amount. On a $400,000 loan, one point costs $4,000 and typically reduces your rate by 0.25%, saving about $65-70/month. Your break-even is approximately 57-60 months (about 5 years).
In the 2026 high-rate environment, buying points can be a smart move for borrowers who plan to stay in their home long-term. With rates near 7%, a 0.25% reduction is meaningful — it saves nearly $25,000 in interest over 30 years on a $400K loan. If you're confident you'll stay past the break-even point, points represent a guaranteed, risk-free return on your upfront investment.
When to Skip Points
Avoid buying points if your down payment is tight (you need that cash), if you might refinance in the next few years (resetting the clock), or if you plan to sell before the break-even. Also consider that the $4,000 per point could alternatively go into an emergency fund or higher-yield investment.