What Are Mortgage Points And How Do They Work? | Bankrate

🏡 Understanding Home Buying Points If you're planning to buy a home, you’ve likely heard about "points" related to your mortgage. But what are they? What Are Points?: Mortgage points are fees you pay directly to the lender at closing in exchange for a lower interest rate. This is also known as "buying down the rate." How Do They Work?: Typically, one point costs 1% of your mortgage amount and can lower your interest rate by about 0.25%. For example, if you’re borrowing $200,000, one point would