Buying Points vs Higher Rate
Compare buying discount points for a lower rate against taking the higher rate with no upfront cost, side by side.
Mortgage figures are entered and computed on your device — nothing is sent anywhereTry: Loan amount=300000, Base interest rate=6.5, Discount points to buy=1, Rate drop per point=0.25, Loan term=30 → $3,000.00, $1,847.15, $1,896.20, $49.05, $364,974.58, $382,633.47, $17,658.89
How to use
Buying points lowers your rate but costs cash up front. Skipping points keeps your cash but leaves you at the higher rate. This tool puts both on the same screen so you can see the monthly payment and total interest each way.
FAQ
How much does one discount point cost?
One point costs 1% of your loan amount. On a $300,000 loan, one point costs $3,000.
How much does my rate drop per point?
A common rule of thumb is about 0.25% per point, but your lender sets the actual buydown schedule. Always read the loan estimate.
Are discount points worth buying?
Only if you keep the loan past the break-even month. The calculator shows that break-even point for your numbers.