Mortgage Points Calculator
Mortgage discount points let you pay an upfront fee to get a lower interest rate on your loan. This calculator shows whether that trade is worth it for your situation by comparing the cost of the points with the monthly saving they give you.
It works out the cost of the points, the monthly saving from the lower rate and how many months it takes to earn back what you paid. Use it to compare the upfront cost against the savings you would make if you kept the mortgage for the full term.
How to use the mortgage points calculator
- Enter the loan amount you plan to borrow in pounds.
- Enter the number of points the lender offers you.
- Enter the interest rate you would pay without buying points, as a percentage.
- Enter the lower interest rate you would pay with the points, as a percentage.
- Enter the term of the mortgage in years.
- Read the cost paid back in, the cost of the points and the monthly saving to judge whether the points are worth buying.
The formula
- Cost of the points = loan amount × points ÷ 100
- Monthly payment = P × r ÷ (1 − (1 + r) ^ −n), where P is the amount borrowed, r the annual rate ÷ 12 ÷ 100 and n the number of months
- Monthly saving = payment without points − payment with points
- Break-even = cost of the points ÷ monthly saving (months)
Worked example
The figures below are made up to show the maths. They are not current prices, rates or product figures.
| Loan amount | £300,000.00 |
|---|---|
| Points bought | 1 |
| Rate without points | 6.75% |
| Rate with the points | 6.5% |
| Term | 30 years |
- Cost paid back in 5 years
- Cost of the points £3,000.00
- Monthly saving £49.59
Tips for an accurate answer
- Use the exact rates and point cost quoted by your lender, as small differences change the result.
- Think about how long you expect to keep the mortgage. If you may move or remake the loan before the break-even month, the points may not pay off.
- Check whether the points cost is added to your loan or paid upfront, since this affects how much you actually pay.
- Compare the result with the other fees on the mortgage offer, such as arrangement and valuation fees.
- Confirm the final figures with your lender or bank before you decide, as this calculator is for working out the maths only.
Questions people ask
How to calculate mortgage discount points?
Multiply your loan amount by the number of points and divide by 100 to get the cost. For example, one point on a £300,000.00 loan costs £3,000.00. The calculator does this for you once you enter the loan amount and points.
Can I use a mortgage points calculator for a Halifax mortgage?
Yes, you can use this calculator with the rates and points quoted for any lender, including Halifax. Enter the loan amount, points, the two interest rates and the term from your offer to see the cost, saving and break-even.
How do I use a mortgage calculator for a UK mortgage?
Enter your loan amount in pounds, the interest rates and the term in years. This points calculator shows the cost of buying points, the monthly saving and how many months it takes to earn back that cost.
How does a mortgage repayment calculator work with points?
The calculator works out your monthly repayment with and without the points using the loan amount, rate and term you enter. It then subtracts one from the other to show your monthly saving.
What does the cost of the points mean?
The cost of the points is the upfront fee you pay to buy the lower rate. It is worked out as the loan amount multiplied by the number of points, divided by 100. For example, one point on a £300,000.00 loan costs £3,000.00.
What is the monthly saving?
The monthly saving is the difference between your monthly repayment without the points and your monthly repayment with the points. It shows how much you pay less each month because of the lower rate.
What is the break-even point?
The break-even point is the number of months it takes for your monthly savings to add up to the cost of the points. After this point, the points start to save you money overall, provided you keep the mortgage.
Does this calculator give financial advice?
No. It only does the arithmetic using the figures you enter. Check the results with your lender or bank before making a decision about buying points.
Sources
This calculator uses the standard loan and interest formulas above and the numbers you type. It needs no outside figures.
An estimate from the numbers you enter, worked out with the formula shown. It is maths, not financial advice: your lender or bank has the final figures. Page checked 23 Oct 2026. Read the disclaimer