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Rate Buy-Down Calculator
Discount points are prepaid interest: you hand over cash at closing to lower your rate for the life of the loan. It's a good trade if you keep the loan long enough.
The same money can often be used differently — a larger down payment, a temporary buydown, or simply staying in your pocket. This shows you the break-even so you can decide deliberately.
Your numbers
One point = 1% of the loan amount.
Your results
Net benefit over your horizon
$1,243
7 years
- Cost of points
- $3,200
- Bought-down rate
- 6.5%
- Monthly savings
- $53
- Break-even
- 60.5 months
- Payment without points
- $2,076
- Payment with points
- $2,023
- Lifetime interest saved
- $19,043
What happens if you change this
Paying 1 point costs $3,200 and lowers the payment by $53 a month, so you break even after 60.5 months. Keeping the loan 7 years, you come out $1,243 ahead — the points pay for themselves and then some. A seller credit can also cover points — see the seller credit calculator.
Ready for real numbers?
Estimates get you oriented. A pre-approval gets you an offer sellers take seriously.
Related calculators
- Mortgage Payment CalculatorSee your full monthly payment — principal, interest, taxes, insurance and mortgage insurance — not just principal and interest.
- Seller Credit CalculatorCompare taking a seller credit against a price reduction — they are not the same, and one usually wins.
- APR vs Interest Rate CalculatorSee why the lowest advertised rate isn't always the cheapest loan once fees are included.
- Refinance CalculatorFind your true break-even point — the month the savings finally outrun the cost of refinancing.
Questions people ask
- Are points tax deductible?
- Points on a primary residence purchase are often deductible in the year paid, and on a refinance they're generally amortized. Confirm with your tax advisor — we don't give tax advice.
- What's a temporary buydown?
- A structure like 2-1 or 3-2-1 that lowers your rate for the first years only, usually funded by a seller or builder credit. It's a different tool than permanent points.
Estimates for education only — not a loan approval, rate quote, or commitment to lend. Actual figures depend on credit, property, program guidelines, and market conditions at the time of lock. Corie Adams · NMLS #1875205 · Network Funding, LP · NMLS ID #2279 · Equal Housing Opportunity.