One mortgage point costs 1% of the loan amount and typically reduces your rate by 0.25%.
Points make sense if you plan to keep the mortgage longer than the break-even period — typically 4–7 years.
This calculator earns its keep at decision points: before accepting a loan, comparing investment platforms, or negotiating salary. The difference between the headline figure and the true cost or return is only visible with accurate arithmetic.
Many financial calculation errors stem from omitting ancillary costs: fees, taxes, insurance, or maintenance. The headline figure (interest rate, monthly payment) is rarely the complete cost of a financial product.
An employee receives a counter-offer from another employer: a £4,000 salary increase but no pension contribution versus the current role's lower salary with 8% employer pension. Running both through the finance calculator shows the true net financial value of each offer.
If you plan to keep the loan 5+ years, points typically save money. Under 3 years, usually not.
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