Mortgage Points Investment

[Ryan Jones]

I’m in the process of purchasing my first investment property at the point to start discussing mortgage points.

Mortgage points reduce my monthly payment. Can I calculate an ROI on the cost of them like a normal investment?

The numbers:

30 year mortgage at 4%: 816 monthly payment

30 year mortgage at 3.5%: 766 monthly payment

Monthly payment reduction: ~50

Cost of points: 3,200

ROI: (50*12) / 3,200 = 18.75%