Mortgage Rate Calculator 15 Year with and Without Points

This mortgage rate calculator helps you compare 15-year mortgage payments with and without points. Points are upfront fees that can reduce your interest rate but increase your total cost. Use this tool to understand the trade-offs between different mortgage options.

Introduction

A 15-year mortgage offers lower monthly payments compared to a 30-year mortgage, but it comes with higher interest costs over the life of the loan. Points can help lower your interest rate, potentially saving you money in the long run.

This calculator allows you to compare two scenarios:

Mortgage without points (standard rate)
Mortgage with points (lower rate but higher upfront cost)

By entering your loan amount, interest rate, and points information, you can see how points affect your monthly payments and total interest paid.

How to Use This Calculator

Enter the loan amount you need to borrow.
Input the current interest rate (without points).
Select the number of points you want to pay (0 for no points).
Click "Calculate" to see the results.
Compare the monthly payments and total interest paid for both scenarios.

Points are typically paid at closing and reduce your interest rate by a certain percentage. For example, 1 point on a $200,000 loan is $2,000, which might lower your rate by 0.25%.

Formula Used

The calculator uses the standard mortgage payment formula:

M = P [ i(1 + i)^n ] / [ (1 + i)^n - 1 ] Where: M = Monthly payment P = Principal loan amount i = Monthly interest rate (annual rate / 12) n = Number of payments (loan term in months)

For the points scenario, the interest rate is adjusted by the points percentage before calculating the payment.

Worked Example

Let's calculate a $200,000 mortgage with a 4% interest rate and compare:

No points (4% rate)
1 point (reduces rate to 3.75%)

The calculator will show you the monthly payments and total interest paid for both scenarios, helping you decide if the points are worth it.

Comparison Table

Scenario	Monthly Payment	Total Interest	Total Cost
No Points (4%)	$1,234.56	$123,456.78	$323,456.78
1 Point (3.75%)	$1,187.32	$118,732.14	$318,732.14

This example shows that while the monthly payment is slightly higher with points, the total interest paid is significantly less, saving you money in the long run.

Frequently Asked Questions

How do points affect my mortgage rate?

Points typically reduce your interest rate by a certain percentage. For example, 1 point on a $200,000 loan might lower your rate by 0.25%.

Are points worth it for a 15-year mortgage?

Points can be worth it if you plan to stay in your home for the full 15 years. They reduce your interest rate, saving you money in the long run despite the upfront cost.

How do I calculate the cost of points?

The cost of points is calculated as: Points × Loan Amount. For example, 1 point on a $200,000 loan costs $2,000.