 TITLE: How Do Mortgage Points Work? CONTENT: How to Calculate Mortgage Points\n--------------------------------\nBefore you buy mortgage points, calculate the break-even point—when your savings from receiving a lower interest rate equal the cost of the points.\nFor example, if you're looking at a $300,000 mortgage, each point will cost $3,000. Say the mortgage has a fixed-rate, 30-year term and 4.5% interest rate, and the point you buy lowers the interest rate to 4.25%.\nAs a result of buying the point, your monthly payment will decrease from $1,520 to $1,476, a savings of $44 per month. Divide the $3,000 by $44 and you'll find it takes 68 months (or 5.7 years) to break even.\nIf you think you may move or refinance before 68 months, buying mortgage points won't have much of a benefit. But if you expect to be making the mortgage payments past your break-even point, mortgage points could save you money.\nFortunately, you can search online and find calculators that can do the math for you. The hard part may be deciding how long you're going to stay in the home. END