Mortgage Points vs Lender Credit

A point is 1% of the loan amount paid at closing to lower the rate. A lender credit is the reverse: you take a higher rate and the lender credits cash toward closing costs.

Break-even on points is the upfront cost divided by the monthly savings. If one point costs $4,000 and saves $40 a month, it takes 100 months to recoup. If you will refinance or sell before that, the credit side often wins.

Credits are useful when cash to close is the constraint. Points can make sense when the rate drop is real, you will keep the loan well past break-even, and you are not about to refinance again.

Always compare two full LE-style numbers: rate, APR, monthly P&I, cash to close, and how long you expect to keep the loan. Do not compare rate alone.

Sal can price both sides on the same day. (516) 250-1334. Educational only. NMLS #1984347.

Ready for real numbers? Tell me about your situation and I’ll come back with actual numbers — start here. Takes two minutes. More detail in the Sal Bossio Mortgage guide. Prefer to talk? Call or text (516) 250-1334, any day, any time. NMLS #1984347.