Rate Buydown & Points Calculator
Paying points buys a lower rate with cash up front. Whether that is smart depends entirely on how long you keep the loan — and on whether someone else is paying for it.
Your loan and the buydown
Monthly savings
$88
$3,413 without points versus $3,325 with.
Cost of the points
$5,400
1% of $540,000.
Break-even
5 yr 2 mo
You said you expect to be in the home 10 years.
Net through 10 years
+$5,195
Savings collected minus what you paid for them.
What this says
Paying $5,400 to move the rate from 6.50% to 6.25% saves $88 a month. You break even in 5 yr 2 mo — inside the 10 years you expect to stay, so the savings continue after that.
How much rate a point buys changes daily and by lender. If you expect to refinance or sell before break-even, applying a seller credit to closing costs instead usually does more for you.
Assumptions behind these numbers
- Temporary buydowns such as 2-1 structures are not modeled here; this is a permanent buydown.
- Property taxes, homeowners insurance, HOA dues and maintenance are estimates you can change; actual amounts vary by property and municipality.
- Home appreciation, rent growth and investment returns are assumptions, not predictions. Real markets move up and down.
- Mortgage insurance figures are estimates. Actual pricing depends on the lender, the mortgage insurer and your credit profile.
- Results ignore income tax effects, such as any deduction for mortgage interest or property taxes.
- Interest rates shown are averages or your own entries, not a rate quote or lock.
Keep going
Educational only: The calculators and information on this website are for educational and illustrative purposes only. Results are estimates based on the information and assumptions entered and are not a loan offer, commitment to lend, financial advice or guarantee of eligibility, rates, costs or savings. Actual loan terms, rates, fees, mortgage insurance and qualification requirements vary by borrower, property, lender and loan program. Speak with a licensed mortgage professional for personalized information.