Should I Pay Points for a Lower Interest Rate?

Input
Loan Information
200,000 Loan Amount
30 Years
6.000 Interest Rate without Points
5.750 Interest Rate with Points

Financial Information
1.00 Points
6.00 Annual Savings Rate

Results
Monthly Payment without Points: $1,199.10
Monthly Payment with Points: $1,167.15
Monthly Savings from Paying Points: $31.96

Cost of Points: $2,000.00
Savings Rate of Return: 6.000 %
Monthly Income from Investment: $10.00

True Monthly Savings: $21.96
Time to Recoup Cost of Points: 7 Yrs, 7 Mnts

These calculations are only estimates and should not be used to determine actual loan costs. Please consult your tax advisor for information on the deductibility of interest for tax purpose. Refinancing or taking out a home equity loan or line of credit may increase the total number of monthly payments and the total amount paid when comparing to your current situation.