Allen Markel, REALTOR® · Texas Premier Realty

Buying

Points vs. down payment

One pile of extra cash — buy the rate down or put more down? The payment each way, and which wins for how long you'll stay.

Today's 30-year average: 7.40% (Freddie Mac survey via FRED, week of Oct 8, 2026). Edit to your lender's quote.

Closing-day money beyond your planned down payment — the pile you could point at either lever.

Same cash, two ways to spend it

$99 /mo between the two paths

A · Toward more down (7.5% down)$2,562/mo
B · Toward points (2.63 pts → 6.74%)$2,463/mo
Planned down payment (5%)
$20,000
Extra cash in play
$10,000
Loan: more-down path vs. points path
$370,000 · $380,000

Staying ~8+ years → points win by $99/mo. Moving or refinancing sooner → more down wins — that cash comes back as equity when you sell; money spent on points doesn’t.

Neither payment includes PMI. Under 20% down, conventional loans carry it — and more down means cheaper PMI, a quiet extra point for the down-payment path. Both payments are 30-year fixed principal & interest.

Live listings across our six counties.

We’re not a lender. This uses the market-typical ≈0.25% rate cut per point (capped at 3) — real point pricing changes daily and varies by lender. Seller concessions can pay for points, too — your down payment they can’t touch. Get the real buy-down table from your lender before deciding; we’ll introduce you below.

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These are the lenders Allen works with. For any lender you’d like to talk to, tap Make introduction — we’ll make the introduction for you.

Allen Markel is a licensed Texas REALTOR®, not a mortgage lender or loan originator. He does not quote rates or terms and does not decide whether you qualify — only a lender can do that. Introductions are a courtesy; you choose who to work with.

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Questions about Points

What it does

  • What does the points versus down payment calculator do?

    It compares two ways to use one pile of extra cash at closing: put it toward a larger down payment, or pay points to buy a lower rate. It shows the monthly payment each way and which comes out ahead depending on how long you stay in the home.

  • What is the difference between paying points and putting more down?

    Points are money paid at closing to lower your interest rate. More down payment reduces the amount you borrow. Both lower the monthly payment, but extra down payment comes back as equity when you sell, and money spent on points does not. The tool shows both side by side.

The inputs

  • What does extra cash available mean in this calculator?

    It is the closing-day money beyond your planned down payment, the pile you could point at either choice. The tool applies the same amount to both paths so you can compare them fairly. Enter an amount you could actually spare and still keep a reserve.

  • How do I pick the quoted rate to use?

    The page shows a current average for a 30-year loan from a published survey, and tells you to edit it to your lender's quote. Your own rate depends on your credit, down payment and loan type. Use a real quote if you have one, because it makes the comparison much more accurate.

  • Why can I choose the down payment from a list?

    The list lets you pick a common down payment percentage, with a few preset options and an Other choice. Many buyers start at the lowest option on the list. Pick the planned amount you are working toward, since the extra cash is added to it.

Reading the result

  • How do I read the two payments the calculator shows?

    Path A is the payment if the extra cash goes toward more down, and path B is the payment if it goes toward points. The difference between them is shown as a monthly amount. The loan size on each path is also shown, so you can see how the borrowed amount changes.

  • Why does the winner depend on how long I stay?

    Points lower your payment every month, so they pay off the longer you keep the loan. If you move or refinance sooner, you may not recoup what you spent. More down comes back as equity at sale, so it tends to win when you stay a shorter time.

  • Why does more down payment also matter for mortgage insurance?

    Under a 20 percent down payment, conventional loans usually carry mortgage insurance, and the page notes that more down can mean cheaper insurance. The payments shown do not include it, so the down payment path can look slightly better in real life than the tool shows.

Limits

  • How does the tool calculate the rate cut per point?

    It uses a market-typical rate cut for each point, with a cap on the number of points. Real point pricing changes daily and varies by lender, so treat the tool's result as a rough guide. Ask your lender for the real buy-down table before you decide.

  • What does the payment in this tool include?

    Both payments are principal and interest on a 30-year fixed loan. They do not include mortgage insurance, property taxes, homeowner's insurance or HOA dues. Your real monthly payment will be higher, but the comparison between the two paths still holds.

  • Can the seller pay for points instead of me?

    Seller concessions can pay for points, but they cannot be used for your down payment. That can change which option makes sense for you. How concessions work depends on your contract and your lender's rules, so ask us and your lender early in the process.

  • Is this a lender quote?

    No. We are not a lender, and the tool is a budgetary comparison. Only a lender can quote your real rate and points. Get the buy-down table from your lender before you decide, and we can introduce you to one.

Next steps

  • What should I do after running the points calculator?

    Try different extra-cash amounts and a more realistic rate from a lender. Then think honestly about how long you expect to keep this loan, since that decides the answer. The page also links to homes for sale at your price, so you can see what you are shopping for.

  • Can I decide this without knowing how long I will stay?

    It is hard to, because the length of time you keep the loan decides which path wins. If your plans are uncertain, the choice that keeps your cash as equity is more flexible. Talk to us to find the right option for your circumstances and timeline.

Using the tool

  • How long do I have to stay for points to pay off?

    That is the break-even question. Points cost cash now and lower the payment later, so the longer you keep the loan, the more they can pay back. The calculator shows the payment each way and which wins for how long you stay. A loan originator can price points for your loan.

See all questions