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Rate vs. Points Breakeven

Find the exact month your borrower breaks even on paying discount points. Full monthly savings math, side by side.

Discount Points Breakeven Calculator
Enter both rate scenarios to find out exactly when buying points pays off.
Loan Details
$
yr
Option A — Par Rate (no points)
%
pts
Option B — Bought-Down Rate
%
pts
Breakeven Point
—
months to break even on points
Option A payment (no points)—
Option B payment (bought-down)—
Monthly savings with Option B—
Cost of points—
Breakeven month—
Total savings over full term—
Net benefit after points cost—
How it works

Breakeven formula

Points cost divided by
Monthly payment savings
Result = months until Option B pays for itself
When buying points makes sense
Borrower plans to stay past the breakeven month. Short-term owners rarely benefit.
Rate-sensitive borrowers on a tight DTI where lowering the payment makes the difference.
Investment buyers holding long-term. The math almost always favors the buydown beyond year 5.
Breakeven benchmarks
Under 24 months: almost always worth it if the borrower plans to stay.
24 to 48 months: worth it for primary buyers, borderline for investors.
Over 60 months: hard to justify unless the horizon is very long-term.
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