What Are Mortgage Points?
![](https://www.bestqualify.com/wp-content/uploads/2020/07/Group-2135-1024x642.png)
Mortgage points are often referred to as rate discount points. You pay your lender a specified fee for a lower interest rate. Each point costs 1% of your total mortgage loan. Many new home buyers decide to purchase points to ensure that they will have a lower monthly payment.
Estimation of possible savings for a $200,000
30-year fixed rate mortgage:
![](https://www.bestqualify.com/wp-content/uploads/2020/07/Group-2155-1024x223.png)
*Disclaimer: These numbers are strictly hypothetical and highly simplified to illustrate points concepts. They are not meant to reflect any specific scenario.
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