Printable cheat sheet

Texas real estate discount points cost and break-even worksheet

Built for Texas sales agent exam prep. Use this to keep the base right (the loan amount), separate discount from origination points, and compare matched rate quotes without inventing a rate change per point.

Reviewed August 30, 2026 · Pearson VUE outline #094401 · CFPB mortgage-points guidance

Use the calculator

One point1% of the loan

A point is 1% of the loan amount, not the price or down payment.

Cost of pointsLoan x points x 1%

Multiply the loan by the number of points, then by 1%.

Rate effectUse the actual quote

A point has no universal interest-rate reduction. The lender, product, and market determine the tradeoff.

Simple break-evenCash points / P&I savings

Use matched loan quotes. Treat the result as a limited cash-flow estimate.

Discount vs originationBuy-down vs fee

Discount points buy down the rate; origination points are a loan fee.

Federal disclosureLoan Estimate, page 2

Points connected to a discounted rate appear in Section A. Other origination charges are listed separately.

The exam setup rule

Confirm the base is the loan amount, not the price.
Read whether the points are discount or origination.
Cost equals loan times points times 1%.
Use the actual rate in each matched quote. Do not assume a universal rate reduction per point.
For cash-paid points, simple break-even equals point cost divided by monthly P&I savings.

Five worked examples

Cost of points$200,000 loan, 4 discount points

200,000 x 4 x 1% = $8,000.

Simple break-even$6,000 cash-paid points, $100 monthly P&I savings

6,000 / 100 = 60 months, or 5 years.

Single point$325,000 loan, 1 point

325,000 x 1% = $3,250 for one point.

Fractional points$180,000 loan, 1.5 points

180,000 x 1.5 x 1% = $2,700.

Loan first$400,000 price, 20% down, 1.5 points

$320,000 loan x 1.5% = $4,800 point cost.

Traps to check

Do not calculate points on the purchase price; use the loan amount.
Do not confuse discount points with origination points.
Do not invent a fixed interest-rate reduction per point. Use the actual quote or the value supplied in the question.
Do not treat one point as a flat $1,000.
Do not round fractional points to whole numbers.

Sanity check

More points cost more, but their rate effect must come from the actual quote.
One point on a larger loan costs more dollars.
A break-even exists only when the lower-rate quote actually saves principal and interest each month.

Discount points workbook

Label the loan amount, point type, payment method, and actual rate quote before calculating. Do not treat a rough break-even as a lending recommendation.

Drill 1 · Find the loan first$425,000 purchase, 15% down, and 1.25 discount points

Find the loan amount, cost of one point, and total discount-point cost.

Loan
One point
Total points

Drill 2 · Separate the fees$280,000 loan, 0.75 discount points, and 1 origination point

Find each charge separately and the combined total.

Discount charge
Origination charge
Combined

Drill 3 · Matched-quote break-even$4,800 cash-paid points; P&I is $2,146 without points and $2,066 with points

Find monthly P&I savings and the simple break-even in months and years.

Monthly savings
Months
Years

Answer key

Loan is $425,000 × 85% = $361,250. One point is $3,612.50. The 1.25-point cost is $4,515.625, or $4,515.63 to the nearest cent.
Discount charge is $2,100. Origination charge is $2,800. Combined charges are $4,900.
Monthly P&I savings are $80. Simple break-even is $4,800 ÷ $80 = 60 months, or 5 years.