Tools · Run the numbers
Points / buy-down break-even
Whether paying to buy down your rate pays off — and how long it takes to recover the fee.
Paying points buys down your rate for an upfront fee. This shows how many months of the lower payment it takes to earn that fee back. (This models permanent buy-downs — discount points. Temporary 2-1 buydowns are a different product.)
Break-even
5 yrs 2 mo
≈ 62 months to recover $7,200
Points are worth it only if you keep the loan past the break-even — sell or refinance sooner and you paid the fee without recovering it. The rate gap alone overstates the savings — points are a prepaid cost, so the true comparison is each quote's APR on its Loan Estimate, not just the rate. What a point buys varies by lender and by day; there's no fixed rate-per-point. Lender credits are the same trade in reverse — a higher rate for cash toward your costs. Purchase points may be tax-deductible; that's a question for a tax professional.
Estimates only — not a quote, pre-approval, or offer of credit. Your actual terms come from a lender's Loan Estimate. Lender pricing decides what a point buys — compare quotes with and without points from the same lender on the same day.
Terms on this page
- Discount pointsOptional upfront fees to buy down your rate; one point is 1% of the loan.
- Break-evenThe point where an upfront cost (points, refinance fees) has been recovered by the monthly savings it bought.
- Lender creditMoney from the lender toward your closing costs in exchange for a higher rate — discount points in reverse.
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