Skip to content
InfinityRateWatchAlert meSign in

Discount points

By Samprit Biswas, editor · Updated October 8, 2026

A discount point is an upfront fee of one percent of the loan amount, paid to lower the rate. Pay more points and your rate falls; pay none and it rises. Points move the annual percentage rate (APR) too, but less.

Today's 30-year fixed purchase estimate: the rate (ring) and the APR (dot)
  1. No points7.56% rate · 7.56% APR
  2. 1.21 points, typical7.31% rate · 7.43% APR
  3. 2 points7.16% rate · 7.36% APR

Each point lowers our estimate's rate by 0.2 percentage points.

Upfront, on a $400,000 loan
  • No points$0
  • 1.21 points, typical$4,840
  • 2 points$8,000

Estimate, not an offer · FFIEC, week of Oct 5, 2026 · Fannie Mae, dated Sep 30, 2026 · U.S. Treasury, Oct 7, 2026

Sources and licences
Average prime offer rates (FFIEC)

Average prime offer rates published by the FFIEC for the Consumer Financial Protection Bureau; a U.S. government work in the public domain.

Loan-level price adjustments (Fannie Mae)

Borrower adjustments derived from Fannie Mae's Loan-Level Price Adjustment Matrix dated September 30, 2026. Fannie Mae does not endorse these estimates.

Daily Treasury par yield curve (U.S. Treasury)

10-year par yield from the U.S. Department of the Treasury's daily par yield curve rates.

Our estimates already include points

Our rates are priced at the points the loans behind APOR paid on average, not at no points, because that is how APOR is priced. Choosing points in Edit details on the home page moves the estimate from there.

When points pay

Points cost money now and save interest every month after. They pay once those monthly savings add up to their cost, so they suit a loan you expect to keep for many years. If you may sell or refinance soon, fewer points, or none, usually cost less in all. The same reckoning applies to a refinance: see Closing costs and break-even.

Points and the APR

Points count in the APR, so more points lower the APR less than they lower the rate. With no points and no other charge, as in our estimate, the APR equals the rate. See Rate vs. APR.

The other way: lender credits

Lenders also work the other way round: a higher rate in exchange for a credit toward your closing costs. It suits a short stay, and costs more the longer you keep the loan.

Try points on today's estimate

How to cite this page

InfinityRateWatch. "Discount points." https://infinityratewatch.com/learn/discount-points/. Data as of Oct 8, 2026.