Paying Points on a Mortgage: Try Guaranteed Rate’s Mortgage Points Calculator

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Everyone wants the lowest rate on their home loan and there are various ways to help lower your home loan rate. One of those ways is to pay for points.


Paying points on a mortgage means to pay a fee directly to the lender at closing in order to secure a more favorable interest rate. Also known as “buying the down the rate”, paying points on a mortgage can ultimately lead to lower mortgage payments month to month. Generally, the longer you expect to own your home, the more likely paying for points will pay off for you.


However, this may not be the best solution for you depending on your loan and finances. To see if paying points on a mortgage to lower your rate is worth it, enter some information in the mortgage points calculator below.




The first thing you’ll need to input into the mortgage points calculator is your loan terms before paying for points, and what it would be after. In each, the loan amount, origination charge, and settlement services will likely remain the same. However, in the “Interest rate” and “Charge For Specific Interest Rate (Points)” rows, you should expect to have differing numbers – a lower interest rate and a higher charge for points.


After filling out additional information regarding whether these represent typical fixed rate mortgages or adjustable rate mortgages, you’re able to calculate how much money you’ll save with points over the course of your home ownership.


The mortgage points calculator can even tell you at exactly what point you’ll break even. If you don’t expect to own your home for longer than that, paying for points may not be the wisest investment. The longer amount of time you plan to exceed that break-even point, however, the more you can feel confident that paying points on your mortgage has paid off. Regardless of which choice you decide to make, it’s important to understand how mortgage points work to make the right financial decision for you.