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How to Calculate Discount Points

Calculate whether buying discount points to lower your mortgage rate is worthwhile.

The Formula

breakEvenMonths = pointCost / monthlySavings

The discount points formula uses the mathematical relationship: breakEvenMonths = pointCost / monthlySavings. Each variable in the formula represents a measurable quantity that affects the final result.

Step-by-Step Method

  1. 1Identify all input values needed for the discount points calculation.
  2. 2Substitute your known values into the formula: breakEvenMonths = pointCost / monthlySavings.
  3. 3Perform the arithmetic operations in the correct order (PEMDAS/BODMAS).
  4. 4Check that your result has the correct units and is within a reasonable range.
  5. 5Verify using the interactive Discount Points Calculator to confirm your answer.

Related Topics

discount pointsmortgage pointsbreak evenrate reduction

Use the Interactive Calculator

Skip the manual math — get instant results with our free Discount Points calculator.

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