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What are points on a mortgage loan?

A point is one percent of the mortgage loan. Lenders will give borrowers a lower interest rate on the loan in exchange for points up front. Points make more sense if you plan to stay in the home for a long time, because your interest savings won't recoup your upfront points for a few years. If you sell right away, you paying points would actually cost you money.




Brenda Procter, M.S., Consumer and Family Economics, College of Human Environmental Sciences, University of Missouri-Columbia















If you'd like to learn more about this and other personal finance topics, the University of Missouri offers 'Personal & Family Finance,' a correspondence course, through the Center for Distance and Independent Study (800-609-3727). Information about this course is available at





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Last update: Tuesday, July 22, 2008




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