Don't Buydown your mortgage rate until you understand this

If you're in the process of buying a house in 2026, and your loan officer is having you buydown your interest rate, here's how you know whether they're giving you a good deal or ripping you off. It's really not that complicated once you understand what points are and how they work. So I'm gonna break this down for you. But first, my name is Nate. I'm a top 1% loan officer licensed in 14 states. And every single day I help people with mortgage tips like this. So if this is helpful, please give my page a follow. To figure out if you should buy down the rate or not, you always need to know what your lender's best rate is with no points and what they're offering you with points. That's how you know how much money you're gonna save and whether the points are worth it or not. Take this example I just made up on a $500k loan amount. If you go from 6.75% to a 6.5% interest rate, you're gonna save around $83 a month. And if it cost you only $2,000 in points, your breakeven is 24 months. If you'll keep the loan longer than 2 years, this could make sense. Example 2: Not Such a Great Deal. $500,000 Loan. Option A: Rate 6.75%, Principal & Interest $3,243, Discount Points $0. Option B: Rate 6.625%, Principal & Interest $3,193, Discount Points $4,000. Monthly Savings: $50. $4,000 divided by $50 = 80 months. Break-even: 80 months. If you'll keep the loan longer than 2 years, this could make sense. But if the lender's offering you a 6.625 interest rate, then you probably won't recover the cost, which sounds like a better deal, but charging you $4k for it, your break even is gonna be 80 months, which is almost 7 years. And by then, you probably could have refinanced or you might not even be in the house. The key is always understanding the cost versus the benefit. The cost is how much you're paying in points and the benefit is how much you're saving with that lower rate. But the only way you'll know that is if the lender offers you two options: the best rate with no points, and the rate with points. Look, I know most of this just went over your head. If you want me to review your specific situation, click the LINK in my bio to setup a FREE 15 minute call.