Should I buy down my rate?
See today's real rate options for your loan, from a lender credit to buying points, and which one saves you the most for as long as you'll keep it.
Your loan
Your plans
| Option | Cost at closing | Rate / APR | Monthly P&I | Break-even | Net savings |
|---|
Best choice by how long you keep the loan
Rates, APRs, and points are today's sample pricing from our wholesale lender network for the scenario shown (single-family, owner-occupied primary residence, 30-year fixed) and change daily without notice. Your actual rate and APR depend on your full credit profile, loan amount, property, and other factors. Net savings compare each option with the no-points rate: cost at closing, principal & interest payments, and the loan balance left at the end of the period. VA funding fee, mortgage insurance, and FHA premiums aren't included. Not a commitment to lend. Nichols Home Lending, NMLS #1660690. Equal Housing Lender.
What a point is
One discount point costs 1% of your loan at closing and lowers your rate for as long as you keep the loan. A lender credit is the reverse: a slightly higher rate, with money back at closing.
The break-even rule
Divide the cost by the monthly savings. Keep the loan longer than that, and points pay for themselves. Shorter, and a lender credit usually wins.
Watch the refinance trap
If rates drop and you refinance, your bought-down rate goes away. Points rarely pay off if you expect to refinance soon.
Getting money from the seller? See whether it should lower the price instead: Price cut or seller credit? →