Frequently Asked Questions

A single discount point is equal to one percent of the loan amount. Discount points are paid to obtain a lower rate. Whether you should pay discount points depends on your financial strategy and how long you expect to be in the property. To calculate how many years it takes to “break even” on the amount paid for points, divide the difference in closing cost between two rates by the difference in monthly principle & interest mortgage payments.

There may also be tax advantages to paying points. Tax consequences vary so we encourage you to consult your tax advisor.