Buying Points On — Mortgage

: If you plan to sell or move within 3–5 years, you likely won't recoup the upfront cost.

Buying points is essentially a long-term investment. It is generally a good idea if: buying points on mortgage

: You itemize your deductions. For a primary residence, points are generally 100% tax-deductible in the year you pay them as "prepaid interest". When to Avoid Buying Points : If you plan to sell or move

Buying mortgage points—also known as —is a strategy where you pay an upfront fee at closing to "buy down" your interest rate. This trade-off trades current cash for long-term savings, potentially reducing your monthly payments and total interest over the life of the loan. How Mortgage Points Work For a primary residence, points are generally 100%

: If buying points reduces your down payment to below 20%, the resulting cost of private mortgage insurance (PMI) may exceed your interest savings.

: You can often buy fractional points (e.g., 0.5 points) or multiple points, usually capped at three or four by most lenders. The Break-Even Calculation