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Mortgage Buydown Savings Calculator
Calculate whether paying discount points to permanently lower your mortgage rate is worth it. See monthly payment savings, the break-even month, and interest saved over the expected hold.
1 point = 1% of loan amount, paid at closing.
Typically 0.125–0.375% per point; lender-dependent.
Monthly savings
$132
vs the no-points payment
Points cost upfront
$8,000
New rate: 6.250%
Break-even
61 mo
5.1 years
Net savings over hold
$4,626
after recovering point cost
Lifetime vs expected hold
Savings if you hold the full term
$39,348
Gross savings $47,348 minus the point cost.
Savings over expected hold
$12,626
Across 96 months, before recovering the upfront point cost.
Buying down the rate only pays off if you hold the loan past the break-even month. A refinance or early sale can throw away the upfront point cost.
EveryCalc calculators are designed for fast, practical estimates with transparent inputs and no required account. We use plain formulas, visible assumptions, and related tools so visitors can check the result from more than one angle.
Results are informational only. For financial, tax, legal, medical, construction, or other high-impact decisions, verify the output against primary sources or a qualified professional.
Learn more about our review process on the EveryCalc methodology page.
How this calculator works
What this page estimates
This Mortgage Buydown Savings Calculator is built to give a quick, browser-based estimate for mortgage buydown savings. Calculate whether paying discount points to permanently lower your mortgage rate is worth it. See monthly payment savings, the break-even month, and interest saved over the expected hold. The inputs stay on the page during normal use, and the result should be treated as an estimate for planning, comparison, or education rather than professional advice.
Calculation approach
The calculator applies the standard relationship implied by the inputs, then formats the answer so it can be checked and reused. For finance tools, the most important step is using consistent units, rates, time periods, and assumptions before comparing the result with another calculator or outside quote.
Example workflow
For example, start with a realistic value you already know, change one input at a time, and watch how the answer moves. That makes it easier to tell whether the result is being driven by the main amount, the rate, the time period, or a unit conversion.
Practical checks
- Use current, real-world numbers when the result affects money, health, tax, or legal decisions.
- Run a low, base, and high case when the inputs are estimates.
- Check the related calculators below when the next decision depends on a different assumption.
How to interpret the mortgage buydown savings result
Best use
Use the result as a planning number for comparing payments, rates, returns, tax reserves, or cash-flow choices before you request a quote or make a commitment.
Cross-check
Compare the answer with the contract, lender estimate, tax form, brokerage statement, payroll record, or invoice that will control the real-world outcome.
Watch for
Do not rely on a single optimistic rate, return, or fee assumption. Money pages work best when you run low, base, and high cases and keep professional advice separate from the estimate.
This page belongs to the Finance calculator library, so the answer should be read in the context of the decision you are modeling rather than as a universal rule.
Before relying on this mortgage buydown savings estimate
Most calculator mistakes come from the inputs, not the arithmetic. Use this short audit before you reuse the answer in a spreadsheet, quote, application, or important conversation.
Confirm source numbers
Match balances, rates, fees, taxes, income, and payment dates against the lender quote, payroll record, tax form, statement, invoice, or contract.
Separate cash flow from total cost
A lower monthly payment can still cost more over time if fees, interest, taxes, or a longer term are hidden in the structure.
Run conservative cases
Test at least one higher-cost or lower-return case before using the output for a purchase, refinance, investment, loan, or tax decision.
Rerun this page when the rate, price, term, fee, tax rule, income, expense, or expected holding period changes.
How to Use
- Enter the loan amount, base rate (no points), and term in years.
- Enter the number of discount points you'd pay and the rate reduction per point your lender offers.
- Enter how long you realistically expect to hold the loan before selling or refinancing.
- Review the monthly payment savings and the break-even month where the payment savings equal the upfront point cost.
- Only buy down the rate if your expected hold clearly exceeds the break-even.
Frequently Asked Questions
What is a discount point?
One point equals 1% of the loan amount paid upfront at closing in exchange for a lower rate. Each lender publishes how much rate reduction each point provides — usually 0.125%–0.375% per point.
How do I know if points are worth it?
Calculate the break-even month: upfront point cost divided by monthly payment savings. If you expect to keep the loan past that month, points usually pay off. Refinancing or selling before break-even erases the benefit.
Is a permanent buydown the same as a temporary 2-1 buydown?
No. A permanent buydown lowers the rate for the life of the loan via discount points. A temporary buydown (like 2-1 or 3-2-1) lowers payments for the first 1–3 years only, using an escrow funded by seller credits or the buyer.
Can I finance the points into the loan?
Some programs allow it, but this increases the loan balance and reduces the payment savings. Most borrowers pay the points in cash at closing from the down payment budget or seller credits.
Related Calculators
Mortgage Points Calculator
Size point costs against specific rate buydown offers from a lender.
Closing Cost vs Rate Calculator
Compare lower-rate high-cost offers to higher-rate low-cost offers head to head.
Temporary Buydown Calculator
Model 2-1 or 3-2-1 temporary buydowns instead of permanent points.
Refinance Break-Even Calculator
Same break-even logic applied to a full refinance vs the current loan.
Mortgage Calculator
Baseline mortgage payment math before adding points or buydowns.
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