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Updated February 2026โขโฑ๏ธ 11 min readโข๐งฎ Mortgages
Should You Pay Points on Your Mortgage in 2026? A Break-Even Analysis
Mortgage points lower your interest rate but cost cash up front. The key question is how long you'll stay in the home โ the break-even timeline decides if points are worth it.
Run the break-even math
Compare rates, points, and total interest to see the real payoff timeline.
Mortgage points in plain English
One point usually costs 1% of your loan amount and lowers your rate by about 0.25%. You pay now to save later.
Break-even: the only number that matters
Break-even equals the upfront cost divided by monthly savings. If you won't keep the mortgage long enough, points are usually a losing bet.
Example: $4,000 in points รท $90/month savings = 44 months to break even.
When points make sense
- โข You plan to keep the loan beyond the break-even period.
- โข You have extra cash after closing costs and emergency savings.
- โข You're locking a long-term home and expect stable income.
When to skip points
- โข You might refinance or move within 3-5 years.
- โข You'd rather keep cash for renovations or liquidity.
- โข The rate reduction is tiny compared to the cost.
AG
Anand Godar
Financial engineer and founder of QuantCurb. Former fintech data scientist building institutional-grade calculators for everyday wealth decisions.
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