What is a mortgage point?
A mortgage point (discount point) is a fee paid at closing to reduce your interest rate. One point typically costs 1% of the loan amount and reduces the rate by ~0.25%. On a $400K loan, 1 point is $4,000 to drop rate from 6.5% → 6.25%. Worth it if you stay in the home 5+ years.
More context
A mortgage point (discount point) is a fee paid at closing to reduce your interest rate. One point typically costs 1% of the loan amount and reduces the rate by ~0.25%. On a $400K loan, 1 point is $4,000 to drop rate from 6.5% → 6.25%. Worth it if you stay in the home 5+ years. The exact answer depends on your specific situation — the numbers above are a strong starting point, but the right next step is to plug in your actual figures.
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