Cost To Buy Down Points - On A Mortgage

The most critical part of this decision is the break-even analysis—how many months it takes for the monthly savings to cover the upfront cost. The Formula

Break-Even (Months)=Cost of PointsMonthly SavingsBreak-Even (Months) equals the fraction with numerator Cost of Points and denominator Monthly Savings end-fraction Example Scenario For a mortgage at a 7% interest rate: Cost of 1 Point : $3,000 (1% of $300k). New Rate : 6.75% (0.25% reduction). Monthly Savings : Approximately $50. Break-Even : $3,000 \div $50 = 60 months (5 years) . Strategic Considerations cost to buy down points on a mortgage

: Each point is equal to 1% of your principal loan. The most critical part of this decision is

Buying down "points" (discount points) on a mortgage is a strategy to lower your interest rate by paying a lump sum upfront at closing. As of April 2026, the standard cost for one mortgage point remains . Cost and Rate Impact Monthly Savings : Approximately $50