Mortgage Points Explained: 2025 Guide to Buying Down Your Rate
Learn how mortgage discount points work in 2025, how to calculate break-even periods, and when buying points maximizes payment savings.
Why this article matters
- One point equals 1% of the loan amount and typically lowers the interest rate by 0.125% to 0.25%.
- Calculate break-even in months by dividing the cost of points by the monthly payment savings.
- Buying points makes the most sense when you expect to keep the mortgage beyond the break-even point and have emergency savings intact.