You can use this mortgage points calculator to compare a loan with no points versus a loan where you are paying points. The calculator figures out how much you will save off your monthly mortgage by paying points, and how many months it will take to recover the points paid.
Calculator Definitions
The variables used in our online calculator are defined in detail below, including how to interpret the results.
Total Home Loan Amount ($)
The total amount of money borrowed for this mortgage, also referred to as the principal on the loan.
Annual Interest Rate - No Points (%)
This is the annual interest rate on the mortgage that does not require the payment of points. This is not the APR, which takes into account other costs associated with the mortgage.
Term of the Loan (Years)
This is the number of years over which the "no points" mortgage will be paid. The most common mortgage terms are 15, 20, and 30 years.
Annual Interest Rate - Loan with Points (%)
This is the annual interest rate on the mortgage that requires the payment of points. This is not the APR, which takes into account other costs associated with the mortgage.
Number of Points Paid
This is the number of points you are required to pay to obtain this annual interest rate.
Upfront Cost / Payment of Points ($)
Points are defined as 1% of the mortgage principal. This means that in addition to other closing costs, you will need to pay this amount upfront to obtain this mortgage.
Monthly Payments - No Points ($ / Month)
This is the monthly mortgage payment for the loan with no points. This does not include mortgage insurance or property taxes, which are sometimes included with your mortgage payment.
Total Payments ($)
The total amount paid to the bank or lending institution over the life of the mortgage.
Total Interest Paid ($)
The total amount of interest charges over the term of the mortgage. This is the cost of borrowing money from the lending institution.
Monthly Payments - Loan with Points ($ / Month)
This is the monthly mortgage payment for the loan with points. This does not include mortgage insurance or property taxes, which are sometimes included with your mortgage payment.
Points Save You ($ / Month)
This is the reduction or (increase) in your monthly payment when comparing the mortgage with no points to the mortgage with points.
Months to Recover Points (Months)
This is the number of months it will take to recover the points paid up front. If you are not planning to stay in the home for at least this number of months, then it might not be worth paying this number of points.
Mortgage Points Calculator
Disclaimer: These online calculators are made available and meant to be used as a screening tool for the investor. The accuracy of these calculations is not guaranteed nor is its applicability to your individual circumstances. You should always obtain personal advice from qualified professionals.
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