Are discount points worth paying on a mortgage?

Each point costs 1% of the loan and typically lowers the rate by 0.25%. Break-even is the upfront cost divided by monthly savings. If you stay in the home longer than the break-even period (often 3-7 years), points are worth it. If you might move or refinance sooner, skip the points.

Should I choose a 30-day or 60-day rate lock?

Lock as short as possible while covering your expected closing timeline. A 30-day lock is cheapest; 60-day typically adds 0.125-0.25% to your rate. Only choose a longer lock if you know closing will be delayed — construction purchases and short sales often need 60-day locks.

When should I lock my mortgage rate vs float?

Lock when you have a signed contract, your quotes are competitive, and you can afford the payment at the quoted rate. Float only if rates are clearly trending down, your closing is far away, and you can absorb a 0.25% increase if wrong. Most buyers benefit from locking early for certainty.

Mortgage Rate Comparison Calculator

Compare rate quotes from up to 3 lenders. Enter the rate, points, and lock period for each — see true APR, break-even on points, and which lender wins at your hold period.

Loan Amount

Lender	Rate (%)	Points	Lock (days)

Lender A

$1,946/mo

6.8% | 0 pts ($0)

Total interest: $400,486

Effective APR: 6.75%

Lender B

$1,896/mo

6.5% | 1 pts ($3,000)

Total interest: $382,633

Effective APR: 6.60%

Lowest Cost

Lender C

$1,847/mo

6.3% | 2 pts ($6,000)

Total interest: $364,975

Effective APR: 6.44%

Advanced

Points Trade-Off, Rate Lock & Rate Type

Break-even analysis, lock period costs, fixed vs ARM comparison

Your planned hold period

Lender A (6.8%, 0 pts) vs Lender B (6.5%, 1 pts)

Break-even: 61 months (5.1 yrs) — if you keep this loan longer, the lower rate wins.

3 yr	5 yr	10 yr	30 yr
Lender A saves $1,215	Lender A saves $25	Lender B saves $2,951	Lender B saves $14,852

Lender A (6.8%, 0 pts) vs Lender C (6.3%, 2 pts)

Break-even: 61 months (5.1 yrs) — if you keep this loan longer, the lower rate wins.

3 yr	5 yr	10 yr	30 yr
Lender A saves $2,449	Lender A saves $81	Lender C saves $5,837	Lender C saves $29,511

Lender B (6.5%, 1 pts) vs Lender C (6.3%, 2 pts)

Break-even: 62 months (5.2 yrs) — if you keep this loan longer, the lower rate wins.

3 yr	5 yr	10 yr	30 yr
Lender B saves $1,234	Lender B saves $57	Lender C saves $2,886	Lender C saves $14,659

Pro

APR Analysis, Historical Context & Negotiation Strategy

True cost comparison, rate perspective, and tactical negotiation advice

APR reflects the true cost of borrowing after points. A lower rate with points may have a higher APR than a higher rate with zero points — always compare APR when points differ.

Lender	Rate	Points Cost	True APR	Rate + APR Diff
Lender A	6.8%	$0	6.75%	+0.00%
Lender B	6.5%	$3,000	6.60%	+0.10%
Lender C	6.3%	$6,000	6.44%	+0.19%

High APR-vs-rate gap signals expensive points. Loans with 0 points have APR equal to their stated rate.

How to Use This Mortgage Rate Comparison Calculator

Enter your Loan Amount at the top, then fill in each lender's Rate, Points, and Lock Period. You can rename each lender row to match actual company names from your quotes. The calculator instantly shows monthly payment, total interest, points cost, and effective APR for every quote — and highlights the lowest-cost lender in green.

What Each Column Means

Rate is the interest rate on your Loan Estimate. Points are discount points (1 point = 1% of loan amount paid upfront to buy down the rate). Lock days is your rate lock period — shorter locks are cheaper, longer locks cost more via a slightly higher rate.

Advanced and Pro Features

Use the Points Trade-Off tab to see exactly when the lower-rate lender becomes cheaper than the no-points lender, broken down by 3, 5, 10, and 30-year hold periods. Use APR vs Rate to see the true borrowing cost after adjusting for points — the only fair comparison when points differ across lenders.

The Formula: Effective APR After Points

Standard Monthly Payment = P x [r(1+r)^n] / [(1+r)^n - 1]

Points Cost = Loan Amount x Points / 100

Net Loan Received = Loan Amount - Points Cost

APR = Rate at which payment on full loan = payment on net loan

Break-Even Months = Extra Upfront Cost / Monthly Payment Savings

When you pay points, you receive less cash but pay the same interest as if you borrowed the full amount. The APR captures this hidden cost. A loan at 6.25% with 2 points on a $300,000 loan has a true APR of approximately 6.63% — higher than a 6.5% no-points loan at 6.50% APR.

Example: Three Competing Rate Quotes on $300,000

Mike's Rate Comparison — $300,000 Purchase, 30-Year Fixed

	Lender A	Lender B	Lender C
Rate	6.75%	6.50%	6.25%
Points	0	1 ($3,000)	2 ($6,000)
Monthly Payment	$1,946	$1,896	$1,847
Monthly Savings vs A	—	$50/mo	$99/mo
True APR	6.75%	6.84%	6.94%
Break-Even vs A	—	60 months (5 yr)	61 months (5 yr)
Total Cost (30 yr)	$400,560	$385,560	$370,920

Lender C wins on total 30-year cost but has the highest APR — the rate looks cheap because of points. If Mike sells in 4 years, Lender A (no points) is cheapest. Past 5 years, paying points wins. The APR column exposes the misleading headline rate.

Frequently Asked Questions

Enter each lender's rate, points, and lock period into this calculator. Compare monthly payments, total interest, and effective APR — which accounts for points paid upfront. The lender with the lowest total cost (interest plus points) is highlighted automatically. For short hold periods, minimize points; for long hold periods, minimize total interest cost.

The interest rate sets your monthly payment. APR (Annual Percentage Rate) includes the rate plus points and lender fees spread over the loan life — it reflects the true cost of borrowing. When lenders charge different points, APR is the only fair comparison. A 6.25% rate with 2 points may have a higher APR than a 6.5% rate with no points, making the lower-rate loan actually more expensive if you refinance within 5 years.

Each point costs 1% of the loan and typically lowers the rate by 0.25%. Break-even is the upfront cost divided by monthly savings. On a $300,000 loan, 1 point = $3,000 for ~$50/month savings: break-even at 60 months (5 years). If you stay in the home longer than the break-even period, points are worth it. If you might move or refinance sooner, skip the points. Most buyers who move within 7 years should minimize points.

Lock as short as possible while covering your expected closing timeline. A 30-day lock is cheapest; 45-day typically adds 0.125% and 60-day adds around 0.25% to your rate. Only choose a longer lock if you know closing will be delayed — new construction, short sales, and complex transactions often need 60-day locks. If your closing gets delayed, ask your lender about a rate lock extension rather than starting over.

Lock when you have a signed purchase contract, your lender quotes are competitive, and you can afford the payment at the quoted rate. Float (delay locking) only if rates are clearly trending down, your closing is more than 60 days away, and you can absorb a 0.25% increase if wrong. Floating is speculation — most buyers benefit from locking early for certainty and peace of mind. Show competing Loan Estimates to lenders before locking for best results.