Think of buying mortgage points like purchasing a toll pass. You pay more upfront so every mile after that costs you less. The question was never "are points good or bad." The question is always: how long is your road?
Here is what most buyers never get told. VA guidelines do not cap discount points, but lenders typically offer up to 2.5, and beyond 2 points the rate reduction starts to diminish. On FHA, sellers or builders can contribute up to 6% of the sales price toward discount points and closing costs. Conventional and jumbo limits vary by down payment and lender. And the insider detail almost nobody shares: the rate reduction per point fluctuates daily based on the secondary mortgage market. Some days it is a great deal. Other days you are paying full price for a discount that barely moved.
Buying points makes sense when you are planting roots and the monthly savings genuinely change your breathing room. Ask your loan officer to show you both scenarios. That break-even number tells you everything.
Disclaimer: Educational purposes only.
