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Breaking even when buying points
n4te
Contributions: 9
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2.58 points is $13932.
$330 a month is saved using 4.5% instead of 5.5%.
$13860 in monthly payments is saved in 42 months.
$5940 in monthly payments is saved in 18 months.
In 18 months at 5.5% the interest paid will be $46549.
In 18 months at 4.5% the interest paid will be $38009.
$8540 in interest is saved in 18 months.
So $14480 is saved in monthly payments and interest in 18 months.
Is the break even point for paying 2.58 points 42 months or 18? Why? Why don't the online calculators I've found take interest saved into account when computing the break even point?
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