Facebook
X
Pinterest
Copy Link
Mortgage points (discount points) are upfront fees you pay to your lender to lower your mortgage interest rate — often called “buying down” your rate.
How It Works:
1 point = 1% of your loan amount
On a $600,000 loan, 1 point costs $6,000
Typically lowers your rate by about 0.25% (for example, from 6.5% → 6.25%)
Are mortgage points really worth it?
Buying points means paying more upfront but saving on monthly payments over time. The key is the break-even point — how long it takes for your monthly savings to equal the upfront cost. If you stay home long-term, points can save you thousands. If you plan to sell or refinance soon, skip them.
Pros:
Lower monthly payments
Long-term interest savings
Possible tax benefits
Cons:
Higher upfront cost
Not ideal if you’ll move or refinance soon
Every situation is different — talk to your lender to see if buying points makes sense for you!
