| Discount Points (or Points) |
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| Mortgage Glossary | |
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Discount Points or Points - Amounts paid to the lender based on a percentage of the loan amount to lower or "buy down" the interest rate. Each point represents one percent of the loan amount. For example, one point on a $100,000 mortgage is 1% of $100,000, or $1,000.
Paying one point on a 30 year fixed mortgage might buy down your interest rate 1/8 (.125) of one percent. Discount points are used to calculate your Annual Percentage Rate. |
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