## Mortgage Points Calculator

The Mortgage Points Calculator will help you determine whether or not paying for points is the best option for you. Points are sometimes referred to as loan discount points. Points are prepaid interest on your loan. Usually, home buyers will pay points to lower the interest rate and save on taxes, since points are usually tax deductible as interest. You may want to follow the rule of thumb that says that the longer you intend to keep the loan, the more points you should consider paying.*

- Enter ballpark values by dragging the sliders left or right.
- Enter exact numbers by clicking in the box and type your number (no commas). The results of your calculations show in the box near the bottom of the calculator.

##### Lower Points Option

- Loan Rate
- This is the interest rate of Lower Points loan.
- Points
- Points are prepaid interest assessed at closing by the lender. Each point is equal to 1 percent of the loan amount (e.g., two points on a $100,000 mortgage would cost $2,000).

##### Higher Points Option

- Loan Rate
- This is the interest rate of Higher Points loan.
- Points
- Points are prepaid interest assessed at closing by the lender. Each point is equal to 1 percent of the loan amount (e.g., two points on a $100,000 mortgage would cost $2,000).

##### Loan Information

- Loan Amount
- This is the amount of money you want to borrow.
- Loan Term
- This is the length of time you want the loan.
- Savings Rate
- The is the interest you would earn were you to invest your money instead of paying it in points.
- Tax Rate
- This is your income tax rate.
- Results
- The results box highlights where each option will save you money.
- Graph
- The graph plots your cumulative savings for both the lower and higher point options. Mouse over the chart and move to a specific year. You can see the comparative readout above the graph. Where the lines intersect is the break-even point. Moving the slider to the break-even point, you will see that it corresponds to a specific year. If you plan to sell the house before the break-even point, the lower points option is the loan to go with. If you plan to keep the house for longer than that, the higher points option is better for you.

*Calculators provided are estimation tools and do not necessarily reflect products, terms or rates that Home Federal Bank may offer. Please contact your Home Federal banker to verify results.