SESKStuff Everyone Should Know
SESK: Stuff Everyone Should Know · sesk.info/home-points-effect

What do you get for paying discount points at closing?

A lower interest rate, in exchange for paying more up front.

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  1. A lower interest rate ✔
  2. A smaller down payment
  3. A shorter loan term

Why: Points trade money now for savings later. You pay more at closing and get a lower rate, which can pay off if you keep the loan a long time.

Huh, didn't know that: Lender credits work the other way: lower closing costs in exchange for a higher interest rate.

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References

Answer: A lower interest rate. Points trade money now for savings later. You pay more at closing and get a lower rate, which can pay off if you keep the loan a long time.

  1. CFPB: Lender credits and points www.consumerfinance.gov/ask-cfpb/how-should-i-use-lender-credits-and-points-also-called-discount-points-en-136
    Points lower your interest rate, in exchange for paying more at closing.
    Checked 2026-10-10.

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