Refinance Points vs No-Points Comparison Calculator
Should you pay discount points when refinancing? Our calculator helps you compare points vs. no-points options and find your break-even.
What Are Mortgage Points?
Discount points are upfront fees paid to lower your interest rate:
- 1 point = 1% of loan amount
- Typically lowers rate by 0.25%
- Example: $350,000 loan, 1 point = $3,500 for ~0.25% lower rate
Points vs. No Points Example
Loan: $350,000 cash-out refinance
| Option | Rate | Points Cost | Monthly Payment | Break-Even |
|---|---|---|---|---|
| No Points | 6.75% | $0 | $2,270 | - |
| 1 Point | 6.5% | $3,500 | $2,212 | ~62 months |
| 2 Points | 6.25% | $7,000 | $2,155 | ~61 months |
When Points Make Sense
Pay points if you’ll:
- Keep the loan 7+ years (past break-even)
- Value payment stability
- Have cash upfront
Skip points if you’ll:
- Move or refinance within 5 years
- Prefer lower upfront costs
- Invest that money elsewhere
Our Calculator Includes Points
When using our calculator:
- Enter your expected discount points (0-3)
- We factor points cost into closing costs
- Break-even analysis includes point recovery
- See total cost with/without points
Points for Cash-Out Refinance
Points are less common with cash-out refinancing because:
- Larger loan amounts = higher point costs
- Higher rates to begin with
- Many prioritize low closing costs
Rule of thumb: If you’ll keep the loan 10+ years, points may save money. Otherwise, skip them.