CALCULATOR: Should I pay points to lower my interest rate on a mortgage refinance?

Graphic of house and money sign

With historic low interest rates, the rush to refinance mortgages is on again.  At some point during the process, your mortgage broker will likely present a list of rate/point options.  What this means is someone can pay an extra fee up front, during the closing, to lower the interest rate for the duration of the loan.  This fee is called points.  Points is a percentage, the number of points is simply the percent of loan.

Seemingly complicated decision made easy

While the proposition might seem complicated, and many folks, including myself, are left scratching their head and wondering what the best choice is.  There are a few situations when it’s never a good idea to pay extra points to lower the interest rate, including:

  • When you will sell the property and payoff mortgage in a shorter time period than the points-payoff months;
  • When you will payoff mortgage and refinance the property before the points-payoff months.

This calculator makes the decision easy and pie.  Enter your mortgage amount and term in months, optionally the annual escrows, and the interest rates and corresponding points.  This will calculate the number of months (vs no points) it will take to payoff the points.

CALCULATOR: Should I pay points to lower my interest rate on a mortgage refinance?

Here is a free calculator to compare various point / rate options offered by your mortgage banker:


CALCULATOR APPEARS ABOVE, if you do not see it, please try using a different web browser.  Use this calculator at your own risk.  I am not a mortgage broker, this is my personal spreadsheet I converted to a FREE WEB CALCULATOR so others can benefit.  I am a licensed P&C insurance agent, previously worked as a notary mortgage loan closer and have helped close hundreds of deals.

How do I choose a mortgage broker to refinance my house

As I mentioned, I’ve been involved with hundreds of other folks mortgage transactions, not as any sort of professional, but as a notary.  I’ve also personally bought, sold, refinanced at least a dozen loans.

It’s a very rare occasion to run across a mortgage banker that is polite, respectful, does what they say, says what they’ll do, and conducts business with the utmost integrity.


Grown up in Cleveland, Ohio, USA., previously lived in Phoenix, Arizona and Tampa, Florida areas, and recently co-located to Asheville, North Carolina area. Trained as an Army MP, but bit of a renegade career wise. Phil has owned successful businesses in insurance, private investigations, surety bail bond industries, and has experience in computer network engineering, hospitality advertising, asset recovery and repossession, and even a few years traveling most of the lower 48 states, Ontario and Northern Mexico as a commercial over the road truck driver. Career long entrepreneur, property investor and rental manager. Phil loves sharing his experiences of great food, travel, experiences and products.