Mortgage Points Calculator
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UPDATED: Oct 21, 2021
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Points are up-front fees on home loans that can be paid by borrowers who are interested in securing a lower interest rate.
The cost of a single mortgage point usually equates to 1 percent of an entire home loan’s amount, so if financing $200,000, each point would cost roughly $2,000.
Typically, the more points that borrowers are willing to pay when originating a mortgage loan the better the interest rate offers will be. In fact, Ginnie Mae says a single point usually reduces an offered interest rate by one-eighth of a percentage point.
Assuming your particular lender is willing to adhere to that formula, eight points would equate to a 1 percent interest rate reduction.
Borrowers should discuss with their lender exactly how much their interest rate will be reduced with a certain amount of purchased points. That way, borrowers can take that information and calculate whether or not the deal is right for them.
If you would like to see what rates other lenders will offer you, feel free to complete the mortgage loan application found at the bottom of your results after clicking calculate.