Use this calculator to determine if purchasing mortgage points is a good financial decision for your mortgage situation. Mortgage points can lower your interest rate and monthly payments, but they come at an upfront cost.
All calculations are based on standard mortgage formulas provided by the Federal Reserve and industry guidelines. Federal Reserve. All calculations are strictly based on the formulas and data provided by this source.
The monthly payment is calculated using the formula:
Payment = P * r(1 + r)^n / ((1 + r)^n - 1)where P is the loan amount, r is the monthly interest rate, and n is the number of payments.
Let's consider a loan amount of $200,000 with an interest rate of 3.5% and purchasing 1 point. The monthly payment will be calculated based on these inputs.
Mortgage points are fees paid directly to the lender at closing in exchange for a reduced interest rate.
Typically, one point can lower the interest rate by 0.25%, but this varies by lender.
Yes, mortgage points may be tax-deductible in the year they are paid, but consult with a tax advisor for your specific situation.
Use this calculator to determine the break-even point and assess if the upfront cost is justified by long-term savings.
No, once paid, mortgage points are non-refundable.