A simple break-even calculation helps when comparing mortgage quotes.
The break-even point is when the upfront cost of buying discount points equals the accumulated monthly savings from lowering the interest rate.
Follow these steps to figure out when you will break even:
Ask the lender for a rate quote with zero points. Then ask for a second quote with points so you can see how much they cost.
Calculate the difference between the monthly payments to see how much you'll save each month by paying points upfront.
Divide the cost for points by the monthly payment difference to see how long it will take to break even.
Example below...