Mortgage rates hovering in the mid-6% range have a lot of buyers asking the same question at the closing table: should I pay points to knock that number down?
It sounds like an easy win, but the math depends entirely on how long you plan to stay in the house.
Discount points are basically prepaid interest.
One point costs 1% of your loan amount and typically shaves about 0.25% off your rate.
On a $400,000 mortgage, that's $4,000 upfront to drop your rate from, say, 6.5% to 6.25%.
Your monthly payment falls by roughly $60.
Divide that $4,000 by the $60 monthly savings and you get about 67 months — a little over five and a half years.
Sell, refinance, or move before then, and you handed the lender money you'll never get back.
So the first real question isn't "are points worth it?" It's "will I still be in this house in six years?" If your job, your family, or your gut says you might move sooner, skipping points usually wins.
If you're planting roots for the long haul, buying the rate down starts to look smart.
There's a second option people often overlook: lender credits.
You accept a slightly higher rate, and the lender covers some of your closing costs.
It's a strong move for buyers who are stretched thin on cash or expect to refinance when rates eventually ease.
The trade-off matters more right now because so many homeowners are sitting on sub-4% mortgages from 2020 and 2021.
Anyone buying today is locking in a rate that could look high if the market shifts.
That makes paying thousands upfront to buy down a rate you might refinance away in two years a genuinely risky bet.
Ask your lender for a loan estimate showing both scenarios side by side — with points and without.
Check whether seller concessions could cover the cost instead of your own savings.
And remember that points on a primary residence are often tax-deductible in the year you pay them, though you should confirm your situation with a tax professional.
One more thing: don't let a sales pitch rush you. "Buying down the rate" gets framed as the responsible choice, but it's really just a bet on your own timeline.
Run the break-even math yourself, in writing, before you sign anything.
The bottom line is that points aren't a scam and they aren't a magic trick — they're a simple trade of cash today for savings tomorrow.
If you're staying put, they can quietly save you tens of thousands over the life of the loan.
Final Thoughts
If there's any chance you'll move or refinance inside five years, keep your money and take the higher rate.