At the same exit month, cash recovery equals current payments minus proposed payments minus cash closing costs. Economic benefit also adds current remaining debt minus proposed remaining debt. Positive values favor the proposal. Optional discounting applies the entered effective annual rate to the same cash and debt streams.
How mortgage points work
Compare written offers for the same loan product and date before deciding how much to pay in points. One point is 1% of the stated base loan amount, but it does not purchase a universal interest-rate reduction. In quote mode, enter the actual alternative rate supplied by the lender. The linear illustration instead uses the reduction assumption you enter and must not be treated as a lender offer. Keep the points charge or credit separate from other cash closing differences so the same cost is not counted twice. Enter the contractual term and use the same extra monthly principal assumption for both loans when comparing repayment paths. The payment here is principal and interest; it excludes taxes, insurance and other housing costs. Review more than the monthly saving, because upfront cash and remaining debt also affect the result at your exit. Preserve the written quote and its date, and confirm with the lender that the selected financing treatment matches the actual offer.
The break-even rule
A short payment-recovery estimate does not fully describe the cost of choosing points. At the selected exit month, cash recovery compares payment cash after allowing for the upfront closing difference. The economic measure also includes the difference between the two remaining loan balances. These measures can favor different choices at the same date, so read the selected measure beside the signed result. The optional discounted measure applies your entered annual discount assumption to the same modeled cash and debt streams; it does not predict an investment return. Inspect the planned-exit marker and the table at that month rather than interpreting the first crossing as a guarantee. An initial recovery may reverse, while sustained recovery describes the remaining modeled path through both loans. A noncrossing scenario stays explicitly unrecovered. Each loan stops collecting payments at its modeled payoff, including a smaller final installment when required. Future refinancing, a sale or different payment timing can change the real outcome and is not guaranteed by this comparison.
Financing points and credits
Paying points in cash increases the upfront amount, while financing the charge changes the proposed principal and its later debt balance. A negative points entry represents a modeled lender credit, so verify how the lender actually allocates that credit rather than assuming it is cash back. The chosen financing treatment is an input to the illustration, not a finding that the loan program permits it. Keep other cash cost differences separate and compare both initial cash and the debt remaining at your intended exit. No default tax deduction is applied, and a possible tax benefit is not presented as guaranteed savings. Review the assumptions and written terms before relying on the result. Saving is optional: a saved scenario can be updated by later valid edits, while Reset changes the working inputs without replacing stored records. Share starts with a clean link; including financial values requires a review, and anyone receiving that link can read them. Copy and CSV contain current financial assumptions, so consider where those files or messages will be stored.