Buying a lower rate only pays if you stay.
Points cost money at closing and save money every month after it. This works out how long it takes one to pay for the other.
Start with the loan and how long you keep it.
Set the loan, the rate you were quoted, and the points you are weighing. The break-even moves as you go.
5 years 2 mo
You keep the loan past that, so the points pay for themselves and keep paying.
- Saved every month
- $73.58
- Paid at closing
- $4,500
- Ahead after 7 years
- $1,681
An estimate built from what you entered — not a quote or an approval.
Get today’s real pricing- Points are paid at closing — $4,500 of cash that is not going toward the down payment.
A starting assumption, not an offer. Your rate is priced to your file.
What a point buys is priced daily. Start here, then check the day’s rate sheet.
Most loans end early — a sale or a refinance. Points stop paying back on the day it does.
The same decision, two ways.
Both loans side by side, and the year your money comes back — where paying up front stops costing and starts saving.
| Figure | With points | Without points |
|---|---|---|
| Interest rate | 6.250% | 6.500% |
| Monthly principal & interest | $2,770.73 | $2,844.31 |
| Paid at closing for points | $4,500 | $0 |
| Paid in by the time you leave | $237,241 | $238,922 |
| Still owed when you leave | $405,151 | $406,873 |
| Interest over the full term | $547,463 | $573,952 |
| Everything paid over the full term | $1,001,963 | $1,023,952 |
A lower rate also retires principal faster, so the bought-down loan owes less at every point along the way.
- Saved so far
- What the points cost
5 years 2 mo of payments covers what the points cost. Everything after that is saving.
| Loan year | Saved so far | Ahead or behind | Owed less |
|---|---|---|---|
| 1 | $883 | −$3,617 | $243 |
| 2 | $1,766 | −$2,734 | $489 |
| 3 | $2,649 | −$1,851 | $736 |
| 4 | $3,532 | −$968 | $984 |
| 5 | $4,415 | −$85 | $1,232 |
| 6 | $5,298 | $798 | $1,478 |
| 7 | $6,181 | $1,681 | $1,722 |
| 8 | $7,064 | $2,564 | $1,962 |
| 9 | $7,947 | $3,447 | $2,196 |
| 10 | $8,830 | $4,330 | $2,423 |
| 11 | $9,713 | $5,213 | $2,640 |
| 12 | $10,596 | $6,096 | $2,846 |
| 13 | $11,478 | $6,978 | $3,038 |
| 14 | $12,361 | $7,861 | $3,214 |
| 15 | $13,244 | $8,744 | $3,370 |
| 16 | $14,127 | $9,627 | $3,503 |
| 17 | $15,010 | $10,510 | $3,609 |
| 18 | $15,893 | $11,393 | $3,684 |
| 19 | $16,776 | $12,276 | $3,724 |
| 20 | $17,659 | $13,159 | $3,724 |
| 21 | $18,542 | $14,042 | $3,678 |
| 22 | $19,425 | $14,925 | $3,580 |
| 23 | $20,308 | $15,808 | $3,425 |
| 24 | $21,191 | $16,691 | $3,203 |
| 25 | $22,074 | $17,574 | $2,908 |
| 26 | $22,957 | $18,457 | $2,532 |
| 27 | $23,840 | $19,340 | $2,063 |
| 28 | $24,723 | $20,223 | $1,492 |
| 29 | $25,606 | $21,106 | $808 |
| 30 | $26,489 | $21,989 | $0 |
Saved so far is what the lower payment has added up to by the end of each year, before the cost at closing is taken off it.
What a point buys changes daily.
This tool assumes a rate cut. A loan officer reads you the real one off the day’s pricing, for your file and your lock.
Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.