Free interactive tool
Should you pay
for a lower rate?
✦
Buying points only pays off if you keep the loan long enough.

Have a loan estimate in front of you? Plug in the par rate, your buydown rate, and what it's costing you (in points or dollars). The math runs in real time, factors in your closing costs and any seller credit, and tells you whether the buydown is actually worth it for you.

Scroll down to play with the numbers
Your situation
Pull these numbers right off your loan estimate. We'll do the math.
Purchase price
$100K$2M
Down payment
0%25%
Down payment $22,500 · Loan amount $427,500
Your rate without points (par rate)
3%12%
Your rate with the buydown
3%12%
How much is the buydown costing you?
Number of points
05 points
≈ $11,756 at closing
Each point is lowering your rate by 0.231%
Estimated closing costs
$0$50K
Most buyers pay 2% to 3% of the purchase price ($9,000 to $13,500)
Seller credit you're getting
$0$80K
Most sellers offer 1.5% to 2% of the purchase price ($6,750 to $9,000). Your credit covers closing costs first; only the leftover buys down your rate.
How long do you think you'll keep this loan?
1 year30 years
Most people say 30 years, but the average homeowner refinances within 3 to 5 years, sooner when rates drop. The day you refinance, your buydown stops paying you back. Be honest: if rates fall a point below yours next year, would you refinance?
Break-even point
You start saving money after about
62 months
▲5 years and 2 months
You pay upfront
$9,000
Out of your pocket at closing
Monthly savings
$146
Lower payment with points
Your monthly payment
Without points (6.875%)
$2,956/month
With points (6.375%)
$2,810/month
Points lower your payment by 5% 5%
If you keep this loan 3 years
-$3,744
You lose money on the points by selling or refinancing too soon
⚠
What this all means

Here's what's
actually happening.

01. You'd pay $9,000 at closing to lower your rate from 6.875% to 6.375%. That's real cash out of your pocket, on top of your down payment and your other closing costs.
02. In return, your monthly payment drops by about $146. That's nice, but $146 a month doesn't add up fast. It takes about 62 months (5 years and 2 months) just to earn back what you paid up front.
03. If you sell the home or refinance before you hit that break-even, you lose money. Most people refinance or move within 3 to 5 years. So in many cases, paying for points means handing thousands of dollars to the lender for nothing.
04. Points only really win when you keep the loan past your break-even, or when a seller credit covers the cost after all your other closing costs are already paid for. If neither of those is true, you're better off skipping the points and keeping that cash.

These numbers are examples based on a $450,000 loan at 6.875%, buying 2 points (2% of the loan) to drop the rate by 0.5%. Real numbers depend on the lender, your loan type, the market, and your credit. We'll run the real numbers for your exact situation. Pro tip: seller credits must cover all your closing costs first before any leftover can go toward buying down your rate.

Want a real answer?

Let's run your real
numbers together.

No pressure. No cost. No commitment. We'll quote your loan with and without points, factor in any seller credits, and tell you straight up whether buying down the rate makes sense for you. In English or Spanish.

Call us: 702-550-9061 Start my application →
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