What Does “Buying Down Points” Mean in a Mortgage?

Ever heard the term “buying down points” and wondered what it means? Simply put, it’s a way to pay upfront to get a lower interest rate on your mortgage — and that can mean lower monthly payments.

? Here’s How It Works:

• One discount point usually costs 1% of your loan amount.
• Each point typically lowers your interest rate by about 0.25% (though it varies by lender).

So, if you have a $400,000 loan, one point would cost $4,000 and could lower your rate enough to save hundreds per month.

Buying points makes sense if you plan to stay in your home for several years and want to maximize long-term savings.

At Bluegrey Mortgage, we’ll help you calculate your break-even point and see if a buydown is the right move for your budget.

Ready to explore your options? Let’s run the numbers together.