You can use this **mortgage points calculator** to compare a loan with no points versus a loan where you are paying points. The calculator figures out how much you will save off your monthly mortgage by paying points, and how many months it will take to recover the points paid.

The variables used in our online calculator are defined in detail below, including how to interpret the results.

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The total amount of money borrowed for this mortgage, also referred to as the principal on the loan.

This is the annual interest rate on the mortgage that does not require the payment of points. This is not the APR, which takes into account other costs associated with the mortgage.

This is the number of years over which the "no points" mortgage will be paid. The most common mortgage terms are 15, 20, and 30 years.

This is the annual interest rate on the mortgage that requires the payment of points. This is not the APR, which takes into account other costs associated with the mortgage.

This is the number of points you are required to pay to obtain this annual interest rate.

Points are defined as 1% of the mortgage principal. This means that in addition to other closing costs, you will need to pay this amount upfront to obtain this mortgage.

This is the monthly mortgage payment for the loan with no points. This does not include mortgage insurance or property taxes, which are sometimes included with your mortgage payment.

The total amount paid to the bank or lending institution over the life of the mortgage.

The total amount of interest charges over the term of the mortgage. This is the cost of borrowing money from the lending institution.

This is the monthly mortgage payment for the loan with points. This does not include mortgage insurance or property taxes, which are sometimes included with your mortgage payment.

This is the reduction or (increase) in your monthly payment when comparing the mortgage with no points to the mortgage with points.

This is the number of months it will take to recover the points paid up front. If you are not planning to stay in the home for at least this number of months, then it might not be worth paying this number of points.

Mortgage Points Calculator - Copyright © 2005 - 2015 Money-Zine.com (Last Reviewed on January 31, 2015)

Disclaimer: These online calculators are made available and meant to be used as a screening tool for the investor. The accuracy of these calculations is not guaranteed nor is its applicability to your individual circumstances. You should always obtain personal advice from qualified professionals.