Mortgage Points Calculator  
The Mortgage Points Calculator will help you determine whether or not paying for points is the best option for you. Points are sometimes referred to as loan discount points. Points are prepaid interest on your loan. Usually, home buyers will pay points to lower the interest rate and save on taxes, since points are usually tax deductible as interest. You may want to follow the rule of thumb that says that the longer you intend to keep the loan, the more points you should consider paying. 



Lower Points Option  
Loan Rate 
This is the interest rate of Lower Points loan. 
Points 
Points are prepaid interest assessed at closing by the lender. Each point is equal to 1 percent of the loan amount (e.g., two points on a $100,000 mortgage would cost $2,000). 
Higher Points Option  
Loan Rate 
This is the interest rate of Higher Points loan. 
Points 
Points are prepaid interest assessed at closing by the lender. Each point is equal to 1 percent of the loan amount (e.g., two points on a $100,000 mortgage would cost $2,000). 
Loan Information  
Loan Amount 
This is the amount of money you want to borrow. 
Loan Term 
This is the length of time you want the loan. 
Savings Rate 
The is the interest you would earn were you to invest your money instead of paying it in points. 
Tax Rate 
This is your income tax rate. 
Results 
The results box highlights where each option will save you money. 
Graph 
The graph plots your cumulative savings for both the lower and higher point options. Mouse over the chart and move to a specific year. You can see the comparative readout above the graph. Where the lines intersect is the breakeven point. Moving the slider to the breakeven point, you will see that it corresponds to a specific year. If you plan to sell the house before the breakeven point, the lower points option is the loan to go with. If you plan to keep the house for longer than that, the higher points option is better for you. 