Should I Pay Points to Lower My Interest Rate?

Use this calculator to compute how much purchased points will affect your monthly mortgage payment and how quickly they will pay for themselves.

The default entries provided in the calculator show a $250,000 mortgage with 4.75% interest (4.15% with points) and a length of 30 years. The Financial Analysis results show a monthly savings of $88.86, a break-even period (when the points that you purchased have completely paid for themselves) of 2 years and 8 months, as well as monthly principal and interest payments of $1304.12 before points and $1215.26 after points.

To use the calculator, enter the following information:

Mortgage information: Amount (of mortgage), Interest Rate, Interest Rate with Points and Length (in years).
Additional Information: Points and Your Savings Rate.

The calculator will compute the following information:

Amount Financed (with and without points)
Monthly Principal and Interest (with and without points)
Monthly Payment Savings
Points Value
Monthly Investment Savings
True Monthly Savings
Time to Break Even

The calculator can also produce a PDF output file for download, and you can click the check box to view the Schedule Table for the time frame selected. The Schedule Table fields include: Number (of payment month), Interest, Principal, and Balance. It also shows totals for every field after each year of the mortgage.

Input Information
Loan Information
Amount : ($)
Interest Rate : (%)
Interest Rate with Points : (%)
Length : (Yrs)
Additional Information
Points : (%)
Your Savings Rate : (%)
 Let Me Print That Form in PDF!

Financial Analysis
  Without Points With Points
Amount Financed : $250,000.00 $250,000.00
Monthly Principal and Interests : $1,304.12 $1,215.26
Monthly Payment Savings : $88.86
Points Value : $2,500.00
Monthly Investment Savings : $10.42
True Monthly Savings : $78.44
Break Even : 2 Years 8 Months

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