Should I pay points on my mortgage?

Discount points are upfront fees (often 1% of the loan amount per point) that reduce your interest rate. Paying points lowers your monthly payment and total interest over time but increases closing costs.

Whether points make sense depends on how long you plan to keep the loan. If you stay past the break-even point (when interest savings equal the cost of points), you may come out ahead. If you sell or refinance sooner, you may not.

Compare quotes with and without points from the same lender, and compare across lenders. One lender’s no-points rate might be similar to another’s rate with points—you need to see the full picture.

Enter each option into a comparison tool so you can see monthly payment, closing costs, and cash to close. That helps you decide whether paying points fits your situation.