What Are Discount Points on a Mortgage?
Discount points, also known as mortgage points or discount fees, are optional upfront fees on a mortgage loan. Discount points are a percentage of the mortgage loan program used to secure a lower interest rate. While these fees may seem costly up-front, they can save you significant money throughout your mortgage loan by lowering your monthly mortgage payments. Whether or not discount points are right for you will depend on several factors, including your mortgage loan amount, interest rate, and financial situation.