Points (Discount Points)
Lending & MortgagesFees paid to a lender at closing to reduce the mortgage interest rate, with each point costing 1% of the loan.
Example
Example: Suppose you take out a $300,000 30-year fixed mortgage at 6.5%. Understanding points (discount points) helps you see how your monthly payment of approximately $1,896 is structured — and how this concept affects your total cost over the life of the loan. Use our mortgage calculator to see how points (discount points) impacts your specific situation.