Mortgage Points Calculator

Yes. Discount points paid on a home purchase mortgage are generally fully deductible in the year paid, provided the loan is secured by your primary residence and points are a normal business practice in your area. Points on a refinance must typically be deducted over the life of the loan rather than all in one year. Consult a tax professional for your specific situation.

Typically, 1 discount point reduces your rate by 0.20%–0.375%. The reduction varies by lender and market conditions. In low-rate environments the reduction per point may be smaller; in higher-rate environments lenders may offer more reduction per point. Always ask for your lender's specific rate/point trade-off (called the "rate buydown schedule") before purchasing points.

If your down payment is below 20%, putting more money down to eliminate PMI is almost always the better use of extra cash — the PMI savings typically exceed the rate reduction from points. If you're already at 20% down, compare the break-even period for buying points against your expected time in the home. If your planned stay exceeds the break-even (typically 4–8 years), points are likely a good investment.