Mortgage Point
A mortgage point, or discount point, is an upfront fee equal to 1% of the loan amount that a borrower pays to lower the interest rate.
What Mortgage Point means
Each point typically cuts the rate by about 0.25%, though it varies. Buying points makes sense when you keep the loan long enough to recoup the cost through lower payments. The Loan Estimate shows the tradeoff.
Florida example
A buyer paid one point, $3,000 on a $300,000 Florida loan, to drop the rate from 6.75% to 6.5%, recouping the cost in about four years through lower payments.
What it is
A mortgage point is an upfront fee equal to 1% of the loan amount that lowers your rate. It is also called a discount point.
Paying points can cut your monthly payment.
When to buy one
Buying a point makes sense if you plan to keep the loan long enough to earn back the cost. The longer you stay, the more it pays.
We calculate your break-even on any point. Apply now and we will show if it is worth it.
Related program: Learn more →
Verify the details for your own situation against these government and agency sources: Freddie Mac Primary Mortgage Market Survey and Federal Reserve H.15 selected rates.