By David Parks · eXp Realty · The Apollo Group · 2 min read
Mortgage points are upfront fees paid to lower your interest rate. A buydown can be permanent or temporary. Whether it pays off depends on how long you keep the loan.
One point equals one percent of the loan amount. Paying points typically lowers the rate by a fraction of a percent, though it varies by lender and market.
Some structures reduce the rate for the first one or two years. Sellers or builders sometimes fund them as an incentive.
Divide the cost of the points by your monthly savings to find the break-even point in months. If you will keep the loan longer than that, paying points may help.
Ask your lender for a few scenarios and compare total cost over the time you expect to hold the loan.
This article is general information, not legal, tax, financial or inspection advice. Every home and situation is different, so confirm details with a licensed inspector, lender, attorney or tax professional.
David is a Greater Denver real estate advisor with eXp Realty and The Apollo Group (Colorado broker license FA100103211). He has closed more than $55 million in volume, earned eXp Icon status in 2025, and holds a 5.0 rating on Zillow from 27 verified reviews.
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