Points, also known as loan discount points, are fees paid upfront by the borrower, calculated as a percentage of the loan amount (1% equals 1 point). Paying points allows borrowers to “buy down” the loan’s interest rate, potentially reducing monthly mortgage payments and achieving significant long-term savings. This strategy is particularly beneficial for borrowers planning to keep the property for an extended period. However, the decision to pay points should be carefully assessed based on the borrower’s financial situation, homeownership duration, and potential savings. Consulting with a lender or mortgage broker is recommended to ensure the best financial outcome.