How do you compare points when you may not keep the loan long?

I’m comparing mortgage quotes where the lower rate requires more discount points, but I’m not sure how long I’d keep the loan. What’s the best way to judge whether the upfront cost is worthwhile?

For an apples-to-apples comparison, I’d line up:

- Interest rate and whether it’s fixed or adjustable
- Discount points and lender credits
- Principal-and-interest payment
- Total monthly payment, including taxes, insurance, and mortgage insurance
- Loan origination, underwriting, and other lender fees
- Cash needed at closing
- Any prepayment penalty or refinance restrictions

The basic break-even calculation seems to be:

**Additional cost of points ÷ monthly principal-and-interest savings = months to break even**

For example, if points add $4,000 to closing costs and reduce the payment by $100 per month, the break-even point is 40 months. That calculation gets less clear if the borrower might sell, refinance, or pay down the loan before then. It also shouldn’t treat the full payment reduction as savings if taxes, insurance, or mortgage insurance are unchanged or likely to change.

Sources for the current development:
Compare and negotiate your loan offers | Consumer Financial Protection Bureau
Mortgage rates today, August 14, 2026: posted rates move at 4 of 8 tracked lenders | RateZip