Mortgage Points

Mortgage points, also known as loan discount points or discount points, are upfront fees paid by the borrower to the lender at closing to lower the interest rate on a mortgage. Each point typically costs 1% of the loan amount and reduces the interest rate on monthly mortgage payments. Points can be deducted over the term of the loan, whether for a new mortgage, refinancing, or loans secured by a second home. 

Understanding mortgage points helps in tailoring loan terms to optimize borrower savings.