How do I calculate the break-even on mortgage points?

Break-even on mortgage points is the point where the upfront cost of buying down your rate equals what you have saved so far in lower monthly payments. Divide the dollar cost of the points by the monthly payment savings they produce to get the number of months it takes to recoup that cost. If you plan to keep the loan or the home past that point, the points are likely worth it; sell or refinance sooner and they may not pay off. A lender can run this math against your actual terms.