Mortgage Points Buydown Calculator: Is 1.5 Points Worth It If You'll Stay 12+ Years?

A bet on how long you'll actually keep the loan

We ran the numbers on 1.5 points for a $450,000 loan at 6.75%: $6,750 upfront to bring the rate down to roughly 6.375%. The breakeven — the month the accumulated monthly savings finally clears that upfront cost — lands well under 12 years for this scenario. For a buyer confident they'll keep the loan that long, the points pay off decisively. For a buyer who might sell, move, or refinance again within a few years, the same points purchase is simply a loss.

How the math works

Each point costs exactly 1% of the loan amount, paid at closing. The rate reduction per point varies by lender and market conditions — commonly cited around 0.25%, but your actual loan estimate is the only reliable source. Monthly savings = the standard monthly payment at your base rate minus the payment at the reduced rate. Breakeven = points cost ÷ monthly savings, in months.

What this tool doesn't model: the opportunity cost of the points money itself if invested instead of paid upfront (a genuinely separate question from whether the points "pay for themselves" via payment savings — compare against your own alternative use of that cash), tax deductibility of points (often deductible in the year paid for a primary residence purchase, subject to IRS rules), or diminishing returns from lenders as points purchased increases (some lenders reduce the rate benefit per additional point beyond the first one or two).

Math runs locally. Inputs never leave your browser.Source on github.

Where buying points is the wrong call

• You might sell or refinance before the breakeven.Job uncertainty, a growing family that might need more space soon, or simply not knowing how long you'll stay all argue against paying for points you might never recoup.
• You'd rather have the cash for other uses.The points money could go toward a larger down payment (reducing PMI or the loan amount itself), an emergency fund, or an investment with its own expected return — compare against your actual alternative, not just "the money sits idle."
• Rates might fall and you'd refinance anyway.If you expect to refinance within a few years regardless (to capture a lower rate), the points cost is stranded the moment you refinance away from this loan — factor that likelihood into your holding-period estimate.
• Your lender's rate reduction per point is unusually small.Not all lenders price points the same — get the actual figure from your loan estimate before assuming a standard 0.25%/point benchmark applies.

What to actually do with this number

1. Get your lender's actual loan estimate showing the real rate reduction per point for your specific loan, not a generic assumption.
2. Give yourself an honest, conservative estimate of how long you'll actually keep this loan — not the full 30-year term by default.
3. If the breakeven comfortably clears your expected holding period, buying points is a reasonable, low-risk move.
4. If it's close, consider what else that upfront cash could do — a bigger down payment, an emergency fund, or an investment.
5. Re-run this any time your plans change (a job offer elsewhere, a growing family) — the right answer depends entirely on your holding-period estimate.