Discount Points Calculator
  Use this calculator to find out if you can actually save money by paying points! Yes, you might, in certain cases, save money by paying points to get a lower interest rate. This results in lower monthly payments and lower total interest you pay over the life of the loan.
 

Whether you save or how much you save depends on how long you keep the loan. This calculator lets you know how long you need to keep the loan to recover the amount you pay up front as points through lower monthly payments.
 

To learn how to use this simple calculator to save real money, click on 'Save $$$' button.
Help
  
Save $$$

 
 
 
     
  Help
  Enter loan details and click on 'Calculate' to see the results and the analysis.

To start over, click on 'Clear All' button.
 
  Save $$$
  Use this calculator to find out how long you will need to keep the loan in order to recover the upfront cash amount you'll pay as points from lower monthly payments.

The calculator also tells you how much money you'll save over the life of the loan - for example, if you pay $4000 up front as points and it lowers the total interest you'll pay by $12,000, then your saving is shown as $ 8,000 (12,000 - 4,000 = 8,000).

Remember this is a simplistic calculation for the sole purpose of demonstrating how points can actually help you save money. A more advanced analysis needs to include such factors as your current returns on investment, your tax bracket etc. which are ignored for simplicity.

Back to the mainpage.