US 2028 Rate Buy-Down Points
2028 rate buy-down: discount points cost 1% loan per 0.25% rate reduction. Break-even calc: lifetime interest saved / cost. Worth it if holding 7+ years.
| Points cost | — |
| New rate | — |
| Monthly savings | — |
| Break-even months | — |
| Lifetime savings | — |
Discount points on a mortgage: pay upfront to lower interest rate. Typically 1 point = 1% of loan amount = 0.25% rate reduction (varies by lender + market). Break-even = cost ÷ monthly savings. Worth it if holding the loan past break-even — usually 5-7 years.
Point Cost vs Rate Reduction
Rule of thumb: 1 point ($1,000 per $100k loan) = 0.25% rate reduction. Some lenders offer different ratios. Always model 0-1-2 point scenarios at closing — lender quotes vary widely.
Tax Deduction
Discount points on primary residence purchase: fully deductible in year paid (if itemizing). Refinance points: deduct over loan life. Reduces effective cost ~20-32% for itemizers in higher brackets.
Sell or Refi Risk
If sold or refinanced before break-even, points are wasted (no benefit). Higher mobility = lower points justified. Locking in long-term 2028 rate = points more attractive.
Last updated May 2026. Sources: CFPB.