Mortgage Discount-Point Break-Even
Monthly payment with and without points, monthly savings, total point cost, and the break-even month; verdict vs your holding period.
Formula and source
Monthly payment at each rate = (P * r) / (1 - (1 + r)^-n), r = rate/12, n = term months. monthly_savings = payment_base - payment_points. point_cost = loan * point_cost_pct/100. break_even_months = point_cost / monthly_savings. Verdict compares holding period (months) to break-even.
First-principles amortization. Discount points and their cost are disclosed on the CFPB Loan Estimate and Closing Disclosure (12 CFR 1026.37-38).
Audience
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