Loan Points Apr 2026

Loan points, specifically , are a tool used to "buy down" a mortgage interest rate by paying more upfront at closing. While they can save homeowners thousands of dollars over time, their value is entirely dependent on how long you keep the loan. Core Mechanics

One point generally reduces your interest rate by 0.25% , though this varies by lender. loan points

One point typically costs 1% of your total loan amount . For example, on a $300,000 mortgage, one point costs $3,000. Loan points, specifically , are a tool used

This is the most critical metric. It is the number of months it takes for your monthly interest savings to equal the upfront cost of the points. Pros and Cons on a $300