Buyer strategy
Mortgage calculator, and what buying down the rate really costs.
See the full monthly payment, then test a discount point: what it costs at closing, what it saves each month, and how long you have to keep the loan before it pays. Straight answers. Real numbers. Zero pressure.
The loan
Starts at Freddie Mac’s 30-year fixed average, 7.40%, week of October 15, 2026. Your rate depends on your credit, the loan and the lender. Change it.
Taxes, insurance, fees
Auto-fills from the state’s own FY2027 mill rate, assessed at 70% of price. Outside Connecticut, choose “I’ll type it” and enter your annual tax below.
Buy down the rate with points
One point is 1% of the loan amount. Points can be fractions.
No default: it depends on the lender, the loan and the market. Ask for the exact figure.
CFPB’s worked example: 0.375 points cut a 5.00% rate to 4.875%, about 0.33% per point. It is an example, not today’s pricing.
Shortest
Most likely
Longest
CFPB suggests comparing the shortest, most likely and longest time you expect to keep the loan.
What the points do
When can mortgage insurance come off?
The Homeowners Protection Act lets you ask to cancel private mortgage insurance when the balance is first scheduled to reach 80% of the home’s original value (a written request, a good payment history and sometimes proof the value has not dropped), and ends it automatically at 78% by schedule. It applies to loans made on or after July 29, 1999, with some exceptions. Ask your servicer. FHA and VA loans have different rules and are not modeled here.
What is a point?
A fee you pay at closing, in exchange for a lower interest rate. One point is 1% of the loan amount: $1,000 on a $100,000 loan. Points can be fractions, like 0.125 ($125).
What does it cost?
Points are added to your closing costs. The cost is simple: points x 1% x the loan. What you get back is the part that varies: the rate cut per point depends on the lender, the loan type and the market.
When does it pay?
When you keep the loan long enough. Divide what the points cost by the monthly saving to get the break-even. If you might sell or refinance before then, points can cost more than they save.
Lender credits are the opposite
You take a higher rate and the lender gives you money toward closing costs, sometimes called negative points. You pay less up front and more every month.
Ask your lender
- Ask for two options in writing: one with points (or credits) and one without.
- Ask what each option does to the interest rate, and the total cost over several timeframes.
- When comparing lenders, ask each for the same number of points or credits.
- Some lenders use the word “points” for any upfront fee that is a percentage of the loan. Ask which fees buy a lower rate and which do not.
Want to talk through your numbers? I can walk you through the payment, the points and the break-even. Free, no obligation. For a rate or a loan, you will need a licensed lender. Let’s talk.
MARC NIETONieto Properties, brokered by Epique Realty914-409-5555
Marc@NietoProperties.com
MarcNieto.EpiqueRealty.com
Sources and dates. Discount points and lender credits: Consumer Financial Protection Bureau, including the 0.375-point example. Mortgage insurance: Homeowners Protection Act and CFPB Compliance Bulletin 2015-03. Starting rate: Freddie Mac Primary Mortgage Market Survey, 30-year fixed average, week of October 15, 2026 (15-year: 6.71%). Connecticut mill rates: CT Office of Policy and Management, FY2027; assessment at 70% of value, CGS §12-62a(b). This calculator is an illustration for a conventional fixed-rate loan. It is not a rate quote, a loan offer, an approval, or tax, legal or financial advice. Marc Nieto is a real estate salesperson, not a loan officer. Talk to a licensed lender about your own loan. Ask your tax adviser about points. Marc Nieto, Epique Realty, CT Salesperson 0816891, NY Salesperson 10401349597. Equal Housing Opportunity.
This calculator needs JavaScript. A quick example: on a $640,000 loan at 7.40% for 30 years, principal and interest is about $4,431 a month. Call 914-409-5555 and I will run your numbers.
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