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   Mortgage calculators  /  Should I pay discount points?

Should I Pay Discount Points to lower my rate?

One of the complications of choosing a mortgage is determining whether or not you should pay discount points. It's important to note that discount points are not an evil mechanism as one reader thought. Discount points allow you to pay down the rate of your loan. In some cases, discount points can be very valuable when considered over the life of the loan.

Discount Point Calculator

Please use the following calculator to determine whether or not you should pay discount points. The calculator will determine how many months it will take to recoup the cost of the discount points. If you will recoup them in less than two years, it is almost certainly worth it to pay them. When considering periods longer than 24 months, please estimate the likelihood that you will still be in the house (and you will not need to refinance).

Should I pay discount points?
Original Interest Rate: %
Interest Rate with Discount Points: %
Discount Points:
Total Home Mortgage Amount: $
Term of the Loan: years

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