A lower quoted rate may require upfront points, so compare break-even time and total costs.

Why it matters

Points make more sense only when the upfront cost is likely to be recovered during the time the loan is kept.

What to focus on

  • Compare rate and APR carefully
  • Calculate break-even time
  • Use the expected holding period
ExamplePaying $4,000 to save $80 a month has a simple break-even period of 50 months before other factors.

Put it into practice

  • Request zero-point and point options
  • Divide cost by monthly savings
  • Compare lender fees
Write down one decision and schedule a short review. Small, repeatable steps are easier to maintain than a one-time overhaul.
Educational information only. Money in Reach does not provide financial, investment, tax, insurance, credit, mortgage, or legal advice.