How do I calculate the break-even point when deciding whether to buy mortgage discount points?

Divide the upfront cost of the points by the monthly payment savings to find how many months it takes to break even. For example, if one point costs $4,000 and lowers your payment by $60 a month, you break even in about 67 months, or roughly five and a half years. If you expect to keep the loan and stay in the home past that point, buying points saves money; if you might sell or refinance sooner, skip them and keep the cash. Points are prepaid interest and may be tax-deductible on a primary home purchase, per the IRS. Run the numbers with the Refinance Analyzer at wealthserene.com/tools/refinance-analyzer, which uses the same break-even logic.