The Process

Should You Buy Points to Lower Your Rate?

July 2025 · 4 min read

Discount points are an optional upfront fee you can pay to lower your interest rate. One point usually costs 1% of the loan amount and reduces your rate by a set amount.

The break-even math

Buying points only pays off if you keep the loan long enough to recoup the upfront cost through lower payments. Divide the cost of the points by your monthly savings to find your break-even point in months.

When points make sense

You plan to stay in the home well past the break-even point
You have extra cash and want the lowest long-term cost
You are not likely to refinance soon

When to skip them

If you might move or refinance before breaking even, or you would rather keep cash for reserves, paying for points may not be worth it.

We can show you the payment and break-even for several point options so you can choose with clear numbers.

This article is general education, not financial, legal, or tax advice, and not a commitment to lend. Loan programs, rates, and requirements vary by lender, county, and borrower and can change. Talk with a licensed loan officer about your specific situation.

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