Should I buy points to lower my interest rate?

Buying points can be a smart strategy - but only when it fits your long-term plan.

Mortgage points are upfront fees you pay at closing to reduce your interest rate. The benefit is a lower monthly payment, but it comes at a cost. The key question is: how long will you keep the loan before refinancing or selling?

This is where “break-even” matters. If you buy points, your lender should show you:

• the cost of the points
• the monthly savings
• the time it takes to recoup the cost

For example, if paying points costs $6,000 and saves you $150 per month, it will take about 40 months (over 3 years) to break even. If you expect to move or refinance before then, points may not be worth it.

In today’s market, many buyers assume they’ll refinance later when rates come down - which can make paying points unnecessary. However, if you’re planning to stay put long-term (especially in family-friendly suburbs like Wylie, McKinney, and Rockwall) points may be a good financial move.

Another strategy: negotiate seller credits and apply them toward points or a rate buy-down. That allows you to lower your payment without draining your savings.

The best answer is always numbers-based — not emotional. Points can be powerful when used wisely.