To determine if a buy-down is right for you, follow these steps: : Calculate 1% of your loan amount per point.

: In 2025 and 2026, with elevated rates, securing even a slightly lower rate can lead to massive interest savings over 15 to 30 years.

: Paying off the mortgage early (e.g., through aggressive extra payments) reduces the total interest you would have saved, making the initial points less valuable.

: If you have surplus funds after your down payment and closing costs, "buying" a lower monthly payment can improve your long-term cash flow. When It Is Not Worth It

: Find the difference between the monthly payment at the higher rate and the lower rate.

: Divide the Total Cost of Points by the Monthly Savings .

Example : Paying $4,000 to save $100/month means your break-even point is (3.3 years). Comparison Table (Sample $500,000 Loan) Interest Rate Upfront Fee Monthly Payment Monthly Savings Break-Even Time ~60 months ~60 months Data based on estimates from PenFed Credit Union . What Are Mortgage Points And How Do They Work? - Bankrate