A Comprehensive Guide to Mortgage Points: What Homebuyers Need to Know

Look beyond the interest rate. Compare the cost of getting it.

Discount points are an upfront payment to the lender in exchange for a lower interest rate. Lender credits generally work in the opposite direction: a higher rate in exchange for help with closing costs. The tradeoff depends on the specific loan offer.

Ask for a side-by-side comparison

• Request the same loan with and without points or credits.
• Compare cash needed at closing and the monthly payment.
• Ask how long the monthly savings would take to recover the upfront cost.
• Consider how long you expect to keep the loan before selling or refinancing.

A lower advertised rate alone does not tell you which offer fits your plans. Ask the lender to explain the written estimates and fees.

Read the CFPB guide to points and lender credits. Guidance reviewed October 17, 2026.

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Original resource: All about Mortgage Points.