Points and Buydowns

Mortgage "points" let you prepay interest to get a lower rate. One point costs 1% of your loan amount and typically reduces your rate by 0.25%.

On a $300,000 loan, one point costs $3,000 upfront. If it drops your rate from 7% to 6.75%, you save about $50/month.

Simple math: $3,000 / $50 = 60 months to break even. If you'll stay longer than about 5 years, buying points can make sense. If you might move sooner, skip them. Some sellers offer temporary buydowns (like "2-1 buydowns") as incentives — a lower rate for the first 1-2 years.