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US Mortgage Discount-Points Cash-Flow Break-Even

Compare upfront discount-point costs with quoted monthly P&I savings and your intended holding period.

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Good to know: Independent ToolsKo worksheet. Official references reviewed November 11, 2026. Example inputs are not current offers or personal advice. Simple undiscounted cash-flow comparison of otherwise comparable fixed-rate loan quotes with the same loan amount and term. One point is 1% of principal. Enter actual quoted principal-and-interest payments; this does not assume a particular rate reduction per point. Points and additional upfront costs are paid in cash, not financed. Excludes lender credits, changed principal/term, loan-balance differences at sale, tax treatment, escrow/insurance, opportunity cost and time value. This cash-flow threshold is not a complete economic comparison or recommendation to buy points. Monthly savings are assumed constant through the entered horizon; a sale or refinance stops them.

How to use it (step by step)

  1. 1Get comparable written quotes with the same principal and term, with and without discount points.
  2. 2Enter the points percentage and other additional cash costs of the points option, plus both quoted monthly P&I amounts. Do not include escrow.
  3. 3Compare the whole-payment break-even month and net cash-flow difference over your horizon. Compare the full Loan Estimates and remaining balances before deciding.

Words to know

Discount point
An upfront charge equal to 1% of the mortgage principal per point. It does not guarantee a fixed rate reduction.
Cash-flow break-even
When accumulated monthly payment savings first cover entered additional upfront cash costs; ignores differences in remaining debt and value of time.

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Sources & methods

References checked November 11, 2026. Read each tool’s scope and assumptions before relying on its result.

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